Realty Prices Soar in Indian Cities
Real estate prices in major metropolitan areas such as Delhi and Mumbai, as well as smaller tier II cities like Jaipur and Coimbatore, have experienced a significant surge in recent years. This upward trend validates the timeless wisdom of American author Mark Twain: "Buy land, they are not making it any more."
Multibagger Potential of Real Estate
The real estate sector presents numerous opportunities for multibagger returns. Many instances exist where properties purchased in 1986 for a mere Rs. 1 Lakh are now commanding valuations of Rs. 1 crore or more. This demonstrates the remarkable potential for wealth creation through real estate investment. Analyzing these instances reveals that property value in specific locations can escalate an astounding one hundred times over approximately 25 years, corresponding to an impressive annual return of 20 percent.
A Case Study in Andheri
Illustrative of such rewarding ventures, Mr. N Mehta, a retired professional, acquired a 1 BHK apartment in Andheri, Mumbai, back in 1977 for Rs. 70,000. Today, the price of this very property stands at a substantial Rs. 70 Lakh. This remarkable appreciation underscores the long-term investment viability of real estate.
Expert Advice on Real Estate Allocation
Mr. Sashi Kumar, head of real estate investment advisory at Birla Sun Life AMC, emphasizes the importance of real estate within an individual investor's investment portfolio within the current economic landscape. While the precise proportion allocated to realty may vary depending on specific financial circumstances, he advocates for its inclusion to benefit from the sector's potential for generating substantial returns. He underscores that each individual should allocate a fraction of their total investments towards real estate holdings. The exact allocation may vary depending on personal circumstances and preferences.