For real estate investors, understanding the differences between asset groups and property types is critical. However, the information available may be inaccurate or difficult to comprehend. Real estate asset groups versus property forms and everything you need to know, whether you're a budding real estate investor or just curious. We're all on the same page on what an asset class is before we plunge in and start learning about the ins and outs of the real estate asset class. 2 BHK Flats in Mihan Nagpur can turn out to be the best asset classes for investment.
Simply put, an asset class is a series of financial instruments that share similar characteristics and behave similarly in the market.
Listed below are a few examples:-
Alternatives to Stocks and Bonds (Aviation, Marine Finance, Real Estate, Art Finance, Cryptocurrency, Private Equity, etc.)
As you can see from the list above, real estate is an asset class that is often lumped together with alternative assets. Alternative assets are assets that are not classified as stocks or bonds in the conventional sense.
Individual investors previously faced a high barrier to entry when it came to taking advantage of opportunities in alternative asset groups.
Individual investors now have access to investments that were historically only open to institutions or the ultra-wealthy, thanks to platforms like Yieldstreet.
There are property forms and property groups of real estate. These two words are not interchangeable and should not be used interchangeably.
The attributes of a real estate investment are classified as Class A, B, or C in real estate property classes. Real estate owners, lenders, and brokers created these classifications to make it easier to interact and rate the property's quality.
These ratings are not specified by any set of laws, and there may be some dispute about a particular asset.
On the other hand, the real estate asset class is divided into two categories of properties: commercial and residential.
In comparison to the lockout time in March and April, the preference for real estate as an asset class has returned to pre-COVID levels. With work-from-home becoming a viable choice, many prospective homebuyers are searching for larger homes and a better lifestyle at more affordable rates in the suburbs. According to the CII-ANAROCK COVID-19 Sentiment Survey, homebuyers' desire to reduce risks is at an all-time high, with more than 61 percent choosing to buy from branded developers even if it is more expensive.
According to the survey, real estate as an asset class has returned to pre-COVID levels, following a drop (to 48 percent) during the lockdown period in March and April due to the then-current uncertainties. The increasing preference is reflected in H2 2020 housing sales of 80,400 units across the top 7 cities, up from 57,900 units in H1 2020, a 39 percent rise. Real estate continues to be the most common investment option, with 57 percent of respondents preferring it over equities and mutual funds, FDs, and gold. Surprisingly, despite its volatility, the stock market is the second most popular option, with 24 percent of votes.
During the lockdown, gold's popularity skyrocketed, with 18 percent of people preferring it over FDs. However, in the latest survey, we can see a slight decrease in its popularity, with just 12% of respondents preferring it in the current scenario. FDs have lost favor among investors due to low-interest rates, despite the fact that they are risk-free. They are now the last choice among all other asset groups.
“Amid the prevalent work-from-home culture and the economy showing green shoots of recovery, we tried to gauge the mood of prospective homebuyers and evaluate their preferences,” said Anuj Puri, Chairman, ANAROCK Group. Consumer tastes have shifted dramatically in the aftermath of the pandemic, and new trends are emerging. Following COVID, real estate attracted more interest than any other asset class, including the stock market, FDs, and gold. Because of the current lowest-best home loan rates and developer incentives and deals, 62 percent of respondents believe that now is a perfect time to purchase a home.
Homeownership has risen to the top of the priority list, even among millennials who previously avoided it.”
In a significant growth, 24 percent of all respondents have already reserved their land, while 62 percent believe that now is the best time to enter the real estate market. End-users now manage a substantial portion of the Indian residential market. According to the survey, 74 percent of those looking to buy a home are doing so for personal reasons, while only 26% are doing so as an investment. During the lockout time, however, the percentage of investors was higher, at 41%.
The most common form of property among prospective buyers is ready-to-move-in (29 percent of respondents). However, we saw a drop in preference in both pre-COVID and lockdown time surveys – at least 17 percent since the lockdown period and 6 percent since pre-COVID stages. One major factor affecting this shift may be that, following COVID, the new supply was largely controlled by branded developers, and consumers felt comfortable buying from them. In addition, inventory in the ready category is reduced. Another explanation may be that developers have offered a variety of incentives and packages, including flexible payment plans, for their under-construction projects, which has enticed potential buyers.
Surprisingly, property that will be ready within a year is the second most preferred option for 27 percent of respondents in the post-COVID survey.
In the post-COVID survey, affordable properties (under Rs 45 lakh) were the most common, accounting for over 40% of the vote, up from 31% in the pre-COVID survey – a 9 percent increase. In the post-COVID survey, Delhi-NCR earned over 38% of the affordable housing demand, followed by Kolkata with 21%.
This time, the Rs 90-lakh budget range property took a backseat and came in second. Bengaluru, Pune, and Chennai accounted for 67 percent of the total demand. For the majority of these respondents, the availability of lower-cost home loans was the most important factor.
Luxury property demand increased as well, rising from 9% in the pre-COVID survey to 11% in the post-COVID survey. Mumbai (MMR) accounts for nearly 58 percent of this market, followed by Bengaluru and Hyderabad.
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