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real estate investment trust india

Real Estate Investment in India vs. Stocks:

Which is Better for Long-Term Growth?

Real estate investment in India has gained popularity with the flourishing conditions through urbanisation and improving the economy within the country. To dissect this matter further, Sembulam has come up with this blog to show a comparative analysis of stock and land market.

Current Scenario: Stock Market Vs Real Estate Investment in India

Both asset classes come with their own baggage of positives and negatives. Let us fathom about, by deducing upon various factors such as potential returns, risk factors, sustainability, diversification tactics and discover which can be your ideal option.

Did you know that the real estate sector for residential purposes increased to the highest of 33 percent YoY in 2023, since the year 2013? This paves way for investors to explore the investment in real estate in India. For someone who cannot afford a large lump sum for initial land purchase, the option of investing in REIT is gaining popularity, as it is just like investing in the blue chip companies in the stock market, except that it is in the real estate sector, and the participants are the likes of DLF, Godrej Properties, L&T Realty Ltd, Prestige Estate, Sembulam and many others.
investment in real estate in india

6 Benefits of Investment in Real Estate in India

  • Real estate investment is easy to comprehend by all, without needing extensive knowledge.
  • Land purchase is a tangible asset, by giving a sense of security and protection, making it a more reliable option for many.
  • According to recent reports by Mordor Intelligence, the Indian land market for residential projects have seen a 29% rise in financial year 2024, a drastic 4% increase since the financial year 2021.
  • It leverages income generation, and acts as a secondary source with a steady inflow of cash, even at times like an economic crisis.
  • Clever investors apply for mortgage loans to monitor and run other properties. The same can be repaid by the income generated from the existing land with its potential.
  • Real Estate Investment Trust India or REIT’s are cropping up as they comply with safety measures such as investing in a land investment plan to diversify your savings and investment portfolio, mitigating a great chunk of risk involved in a single market.
Structures like malls, warehouses, office spaces etc. are becoming a popular choice for REIT. According to reports, REITs saw a rise in their potential from the 70s till 2019, at a steady pace of 11.8%.
real estate investment trust india

4 Challenges in Real Estate Investment in India 

  • Investment in real estate in India require more documentation and more work. Maintenance and paperwork, especially rental properties, need extensive monitoring. 
  • It has high transaction costs compared to the stock market, due to the lengthy procedure involved.  
  • Real estate is less liquid compared to stock markets. 
  • There is no diversification option.   

4 Main Advantages of Stock Market Investment

  • Stocks are designed so they can be transacted easily and immediately. 
  • The trend of maximum return on investments is higher in this market.    
  • Diversifying funds within the stock market like mutual funds can help limit the risk.   
  • Lesser transaction fee 
Stock Market Investment​

5 Challenges of Stock Market Investment

  • Stock prices fluctuate due to many external factors including economic indicators, company performance, and market sentiment, making it unreliable for those seeking security. 
  • The overall flow in the stock market may be tempting to make an entry, for quick monetary returns. However, the rate at which you spend the amount also is so high, that you would not have relished it properly. 
  • Unexpected hinderances in between, for the growth of the economy result in huge losses, overnight.  
  • Though there is individual ownership, it is not a tangible asset unlike the real estate field. Here, the company itself is considered a liability, more than an investment. 
  • This niche market needs regular updates in knowledge and market research to invest in good stocks that give substantial returns over time, proving it to be a costly affair. 

Comparative Analysis: Stock Market and real Estate Investment in India

Feature 

Stock Market 

Real Estate 

Initial Investment 

Typically, lower 

High 

Liquidity 

Easy  

Less liquid 

Risk Factor 

Highly volatile market 

Generally, a stable market 

ROI 

Irregular increase and decrease based on market

Slow and steady increase in ROI, however there is possibility to generate rental income 

Management 

Minimal management 

Active management needed in terms of maintenance 

Ease of transacting 

Option of offline and online, and immediate 

Easy transaction, however, it takes time 

Diversification 

Convenient to diversify across markets

Limited to geo locations. Option of REITs make it easy to diversify 

Asset type 

 Intangible asset 

Tangible asset 

Sembulam is a premium real estate brand in Dindigul that is committed to stand by you, while you are on the verge of purchasing a high yielding spacious plot at affordable pricing. By choosing Sembulam projects, you have access to a wide range of investment opportunities, like residential plots, apartments, commercial spaces, and mixed-use developments. Our team of dedicated executives provide full support throughout the investment journey.

Conclusion

By closely comparing and analyzing stock and real estate investment in India, there are many benefits in both markets. After assessing the above analysis carefully, real estate is the clear winner as it simply is an income generator within the investment. When it comes to risk factors as it is on the lower side, and the growth is seen at a steady pace as land is a limited resource, while the population only seems to increase. Real estate can be a game changer even for a novice looking to invest in real estate, while the stock market is a sea full of sharks, and without proper guidance, you are at the risk of sinking and losing your investment. Adding to this, there are projections of the real estate market gearing up for an upsurge in prices and it is estimated that it will reach a Trillion USD by the 2030s.

The Sembulam project exemplifies the potential of real estate investment in India by developing premium sites and properties in Dindigul .Included as one of the smart cities within a few years, its strategic location at the foothills of central Tamil Nadu, modern amenities, sustainable development practices and rapid development in infrastructure within the city, Dindigul presents a compelling choice towards prosperity for those looking to invest in an ideal land and its benefits like regular income and steady appreciation among many.

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    Frequently asked questions

    Got questions? We’ve got the answers!
    Given the country’s current growth rate of 8.2% in current FY24, and improving by the day, real estate investment in India for long term is the best option.

    Real estate is a tangible asset, with the possibility of income generation through regular rents with lower liquidity risks compared to the stock market.

    Both options are good, however if you have lesser risk appetite and want regular income, real estate investment is a better option.

    You can invest in Real Estate Investment Trust India, as the companies in it are in the stock market, and you can get the returns as per stock market, without its risk attached.

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