You have just been back to Diwali partying – maybe you were a little more overeaten, spent late nights with family, red-packet (Shagun) flashbacks – and you are asking yourself: “What now? Where do I put my savings now? Is Real Estate Still the Safest Indian Investment?”
I have encountered this question as an investor trainer in the past twenty years. And one response that is occurring again and again is: real estate. However, will it continue to be the safest Indian investment in 2025? It is time to make a cup of chai and have a bite.
Why the Indians have been tempted to invest in safe real estate.
Purchasing property in India has been as much an investment as it was a statement and generations. Your own roof meant security of status, social and possibly even a legacy if you were wealthy.
Real estate in most situations was a classic pati-patra investment: not fast, not speculative, not elusive–not as volatile as the stock market. That is the comparison that I prefer: owning property is similar to having a long-term fixed deposit in bricks and mortar. It provides you with emotional as well as monetary rest.
Nevertheless, the most important words in this case are slow and tangible. Property is unlike fast-moving assets which are illiquid. You cannot sell it in an hour when you need the money.
The new reality: What the statistics are telling.
Returns have slowed
In the past, Indian residential property has been able to provide two-digit growth in most of the metros. Indicatively, there were reports of a CAGR of about 13% in the recent years. ETRealty.com
However, today: as Trading Economics data shows, the residential property prices in India were averaged at 9.9% per annum in the period between 2010-24. Trading Economics
Growth is still there–but most of us have passed the days of 20 percent plus returns.
Market size remains large
The Indian real estate market (all segments) will reach a size of USD 1,184 billion in 2033 with a CAGR of around 10.5% between the years 2025 to 2033. IMARC Group+1
This is big stuff – not necessarily fireworks.
Real estate vs. mutual funds
In place of this, most of my clients query: Should I invest that lump sum in some mutual fund rather than flat in Pune?
Based on a number of comparisons, mutual funds are more flexible and have reduced ticket size. Real estate requires huge capital, is less liquid. Bajaj AMC+1
Concisely: real estate is not a fast game; it is a long term game.
So: Is Real Estate still the safest Indian investment?
“Safe” is meaningless to different people. These three critibility benchmarks work as follows:
| Criteria | How Real Estate Stacks Up |
| Capital Protection | Physical object, inflation cover in other instances. But geographical relationships and developer risk are important. |
| Liquidity | Low. House sells can take months, usually. |
| Predictable Returns/Horizon | Average (8-12% common in most locations) over the long-run. Cambridge Wealth |
My conclusion: To working professionals and investors who:
- be in at least five (preferably, 8-10) years ahead in the offing;
- can tie up that capital (a 6-12 months of the costs as a buffer);
- select the appropriate location and asset;
then yes–real estate can be left one of the more conservative of your holdings.
However, when you want to make it in the short-term or when you want to be flexible, the so-called safest tag starts to break.
Three things you need to do after Diwali Reality Check.
- Apply the ‘5-Year Rule’.
When you cannot possibly hold the asset at least 5 years, then it should be treated, not like a real estate investment, but like a gamble. The capital and delivery is long before it is absorbed by the market.
In my case, in many cases, the properties remain idle over weeks and months before a buyer comes in, particularly in the non-prime areas.
Be very frank on price and concealed expenses.
As the cost of inputs escalates, labour, approvals, GST, we are not in the times of low cost. And in case you are buying a house to invest (not to reside), consider: the maintenance and property tax, potential vacancy, stamp duty, agents commission.
Location is king, however, be realistic on returns.
The flat in central Mumbai may gain gradually, the peripheral city with a good connection may gain at a higher pace, however, it is also more risky (infrastructure, quality of developers).
Like starting the motor in your car after a long winter layoff, a fresh set of tires is like a real estate investor who makes an initial cash injection, maybe INR 1 million, and pushes the reset button: he has just begun another adventure. You don’t have a foot to the floor–you idle it, you check the oil, you turn the key so carefully. Same with property: select the engine (location) that is right, ensure fluids (budget and cashflow) are okay and then fly.
Busting Common Myths
Myth: “Property always goes up.”
Reality: a lot of micro-markets go dead or fail. Every apartment does not necessarily increase twofold within 10 years.
Myth: “Surely it is safer than the stock market.”
Reality: It is less fluid in most instances–but less fluid, as well.
Myth: “Rent will cover my EMI.”
Reality: Not guaranteed. Vacancy, churn, tenant delays–they take place.
FAQs
Q: Can I purchase a small flat for investment purpose say 1 BHK?
A: Yes, you can, but not with the expectation of “big” returns in a short period of time. Learn the neighbourhood politics.
Q: Does it make sense not to invest in real estate currently?
A: No. Even when your goals are the same (between long-term asset, part of diversified portfolio) it does not make no sense. And just do not look for miracles overnight.
Q: What about commercial property or REITs instead?
A: Commercial property? Higher risk, more volatile. REITs introduce better liquidity real estate exposure. They may fit in with the needs of people seeking bricks without huge investment as stated in the SEBI regulated systems. www.bajajfinserv.in
Final Word
You are going into a period of reflection right after Diwali, you are planning your investments over the next 12-18 months. The issue is whether real estate remains the safest Indian investment? has no universal solution. Nevertheless, the following should not be forgotten here:
When you consider it as a long-term strategic asset, then look at your cash-flow, location, time.
Okay, I think if you are looking for short-term liquidity or high return maybe look elsewhere for it or diversify.
Real estate is also not obsolete in India–but it is safe now to be informed, patient, disciplined. Going back to my cup of chai, I shall conclude this way: Yes, you can count on real estate being a good stable part of your portfolio–but only with reasonable expectations, a long time frame, and a contingency plan. Otherwise, you will be left in traffic jam on the highway of investment – and that is not the place where you will want to spend too long.
Let us know what you think — is real estate still the safest Indian investment for you?
