{"id":658,"date":"2020-11-19T11:15:15","date_gmt":"2020-11-19T11:15:15","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=658"},"modified":"2020-11-23T07:10:40","modified_gmt":"2020-11-23T07:10:40","slug":"opportunity-is-standing-at-the-doorstep-of-real-estate-sector-grab-it","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/opportunity-is-standing-at-the-doorstep-of-real-estate-sector-grab-it\/","title":{"rendered":"Opportunity is standing at the doorstep of real estate sector! Grab it."},"content":{"rendered":"
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In the world of investing, there is a separate audience for\ninvestment in equity markets and real estate. We have seen brilliant minds like\nBlackrock\u2019s Larry Fink in the field of trading and investing in equity markets\nwhile Blackstone\u2019s Stephen A. Schwarzman has made fortune in real estate and\nother private equity. Therefore, we can state that investing in both asset\nclass have made fortune for potential investors. For an investor, clear\nrequirement is to generate alpha after deducting the associated expenses. So, what\ncould be a better situation than investing in equity markets bring premium of\nboth assets? <\/p>\n\n\n\n

Performance of Real\nEstate sector in Equity Markets<\/strong><\/p>\n\n\n\n

It is worth-mentioning that the sunshine in equity markets was largely supported by financials, FMCG and technology stocks in last few years while real estate sector has not performed well and failed to complement the returns from index. No one can forget the 2008 financial crisis in which banking and housing finance companies were collapsed due to sub-prime loans issued to the general public against residential real estate. This was the time when real estate sector took a hit and has not performed since then. The situation of Covid-19 has dented the demand of real estate more as Work from Home (WFH) facility advocated by various companies has dented the demand and various MNC\u2019s are expected to continue the same policy further as they have realized that the WFH facility will hammer their rental, HR and other maintenance expenses.<\/p>\n\n\n\n

Must Read: Why Morgan Stanley has revised the target of Sensex to 50,000 by Dec 21<\/a><\/p>\n\n\n\n

Factors that are\nmaking investment in real estate sector favorable<\/strong><\/p>\n\n\n\n

  1. Interest rates at ground level: <\/strong>Central banks in various countries have hammered their benchmark rates at lowest levels in order to get the aggregate demand at restoration levels. Federal Reserve is keeping interest rate at 0-0.25%, RBI has kept rep rate at 1.0% and European Central Bank has kept the benchmark rate at zero levels. Moreover, their commitment over keeping rates to ground to support the GDP and macros will keep injecting liquidity into the economy. This would boost Housing Finance Companies (HFC\u2019s) and other financial institutions to disburse more loans to homebuyers. So, what would be any other ideal scenario for a homebuyer to make his dream home when interest rates are grounded?<\/li>
  2. Reduction in stamp duty rates in Maharashtra: <\/strong>One more quantitative factor to advance the demand of real estate has been taken by Maharashtra government. The government has reduced stamp duty by 3% on buying real estate in financial capital of India. This will help in sales recovery of the real estate which was plunged due to Covid-19 epidemic. The initiative taken by Maharashtra government is expected to push other states too that may further onset the real estate demand.<\/li>
  3. Heavy leakage of liquidity into economy: <\/strong>The rationale behind investing in real estate stocks lies in the unprecedented liquidity infused by administrations and central banks from US to India. We have seen that the helicopter money deployed the governments have fueled the precious metals and equity markets. On the basis of rotation policy followed the value investors, it is high time that real estate will witness a buzz and investing is real estate stocks is a healthy bet to bank upon.<\/li><\/ol>\n\n\n\n

    Also Read: How Joe Biden\u2019s win is a win for Indian economy too?<\/a><\/p>\n

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    In the world of investing, there is a separate audience for investment in equity markets and real estate. We have seen brilliant minds like Blackrock\u2019s […] Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":659,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,10],"tags":[],"class_list":["post-658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-market","category-investment","category-featured"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=658"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/658\/revisions"}],"predecessor-version":[{"id":662,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/658\/revisions\/662"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/659"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}