Why Do Indians Still Prefer To Invest In A Property?

For most Indians Real Estate isn’t just a way to invest but, it is an emotion. Owning a home is often seen as a major life milestone, a symbol of stability and for many the ultimate financial security. While stocks, mutual funds and cryptocurrencies have gained traction in recent years property still holds a special place in Indian households.

Why does Real Estate continue to be the Go-To Investment for Indians?

Let’s break it down.

FICCI-ANAROCK Consumer Sentiment Survey 2024 highlights a strong homeownership trend with 67% of buyers purchasing property for self-use, 59% of Indians still prefer to invest in real estate over stocks, gold and other asset classes while 33% of investors focus on rental income and capital appreciation.

1. Real Estate Feels More Secure Than Other Investments

Unlike stocks or mutual funds which fluctuate daily, property is a tangible asset you can see, touch it and pass it down through generations. There is a deep-rooted belief that land and homes are safe to invest which is why many Indians prioritize buying property over putting money into the stock market.

Besides, no one has ever said “I lost everything because I invested in a house,” right?

2. The Promise of Steady Returns

Property values may not skyrocket overnight but they do appreciate steadily over time. With urban expansion, infrastructure development and rising demand for housing real estate often guarantees a solid return on investment.

On top of that rental income provides a passive revenue stream making property an even more attractive option for those looking to earn while they invest. In cities like Pune and Bangalore rental yields have increased significantly proving that investing in the right location can be highly rewarding.

 With rental values soaring by 70% in major cities investors are securing steady passive income. Larger homes (3BHKs) are in high demand as people prioritize comfort & ownership over renting.

3. The Emotional and Cultural Connect

Ask any Indian parent about their biggest dream and chances are they’ll say “Apna ghar hona chahiye” (We should have our own home). There’s an emotional satisfaction in owning property; it’s about security, pride and even social status.

For many, renting feels like “wasting money,” while homeownership is considered a smart and responsible financial decision. This mindset is deeply ingrained in our culture making property investment a natural choice for most Indians.

4. Tax Benefits and Government Incentives

The Indian government has always encouraged real estate investment through tax deductions on home loans, exemptions on capital gains and benefits under schemes like Pradhan Mantri Awas Yojana (PMAY). These incentives make buying property more affordable and financially sensible compared to other investment avenues.

5. A Hedge Against Inflation

Inflation eats into the value of money but real estate usually keeps up with or outpaces inflation. While cash loses value over time, property prices tend to rise making real estate a great way to preserve and grow wealth in the long run.

Think about it: a flat in Mumbai that cost ₹30 lakh two decades ago is now worth crores. That’s the power of real estate!

6. FDI Inflows and Market Growth

Real estate isn’t just a favorite among Indian investors, foreign investors are pouring money into it too. The sector is now one of the top contributors to Foreign Direct Investment (FDI) with global players investing in Indian residential and commercial properties. With such strong backing the industry is only set to grow further.

7. More Than Just an Investment, It’s a Legacy

Unlike stocks or mutual funds which you can’t physically pass down, property is something that stays in the family. It’s a legacy something you can leave behind for future generations. This emotional factor plays a big role in why Indians prefer buying property over investing in other financial assets.

Conclusion

At the end of the day, investing in property isn’t just about money, it’s about security, stability and a sense of belonging. While the stock market and mutual funds offer great returns they come with risks and volatility that real estate simply doesn’t.

So, whether it’s a small apartment in a developing suburb or a luxurious villa, real estate remains India’s favorite investment and it’s not likely to change anytime soon.

What do you think? Do you believe real estate is the best investment or do you prefer other options? Share your thoughts!