“It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.” – Donald Trump
Indeed, real estate is an imperishable asset that continues to appreciate in value. For Indians, it is the lifelong security for the family and the next generations. But what has changed in the last decade or so, is that investing in real estate now has to be driven by smart strategy and with market insights to avoid financial pitfalls.
1. MYTH: PROPERTY PRICES KEEP APPRECIATING
If you believe that property prices never fall, that’s the biggest myth. Although property markets stay stable or continue to rise, due to the inherent demand dynamics, the prices can decline in areas where there is either more supply than demand or due to specific local issues. One can detect the slump, when builders offer fancy offers such as free parking, stamp duty waiver, zero GST, gold coin, white goods or free modular kitchen or even a free holiday trip. Instead of lowering the property price, the price drop is disguised as incentive or offer. The price cut is real -- but carefully hidden through creative marketing.
REALITY: Home prices do get affected by macro and micro market dynamics like stocks, bonds or gold.
2. MYTH: PROPERTY IS IMMUNE TO ECONOMIC DOWNTURNS
Market fluctuations due to interest rates, government policies or global f inancial headwinds or even sheer oversupply of housing can cause values to drop significantly. During stock market volatility, many consider real estate as ‘safer’ for investing but, that perception is falling apart, as in real estate the risk is front-loaded (land title issue or builder default) and hidden (liquidity due to location or ill-timed sale). Unlike stocks that can crash or crypto that can vanish, real estate is real but not protected from depreciation. Delayed projects, legal issues, tough to sell market and lower selling price due to location specific matter can turn it into a bad investment.
REALITY: Stock ownership allows for course correction but you cannot change a property and inflation can erode real returns over time.?
3. MYTH: LANDLORDS GROW RICH IN THEIR SLEEP
The belief that real estate is a low-effort path to wealth is a myth. Real estate is no more a passive investment and requires active management. For rental property, owners have to engaged in tenant search, lease agreements, and maintenance from t ime to time. In case the investment is in a self-use under construction property, one has to be mindful of project progress. Unlike a FMCG or automobile industry where the product risk lies with the company, not the customer, in real estate projects are majorly funded by homebuyers’ money and thus the risk of any product issue lies with them.
REALITY: Owning a home is an emotional aspiration for Indians, other than just returns, but it does take a hands on approach and is rarely a “set-it-and forget-it” approach.
4. MYTH: BUYING REAL ESTATE NEEDS A LOT OF MONEY
While, traditional property buying through home loans may entail a considerable down payment and recurrent EMIs. One can consider properties auctioned by banks on considerable discount; buying a land too comes at a more reasonable cost. Properties in smaller towns that are industrial hubs our tourist destinations with good demand can prove reasonably affordable. Then there is the modern investment avenue, REITs that allow you to invest as little as ?10,000 to ?15,000 in a portfolio of income-producing real estate properties just like mutual funds.
REALITY: Conventional home buying is expensive but, specific segments, micro markets and realty tech platforms offer lower entry to real estate.
5. MYTH: LOCATION. LOCATION. LOCATION
Location is no longer the only determining factor, when it comes to buying a real estate.?The investment value can decline for any number of factors like capital improvements, drastically reducing returns or downturn in the overall market. Beyond location, unfavourable infrastructure development, demographic shifts, local economic depression and adverse demand supply pattern can impact the value of the property over time. It is a myth that it is worthwhile to invest only in developed locations for want of stability and assured returns & rentals. Presently, some of the highest capital appreciations have been seen in suburban areas and smaller cities. In developed locations, property prices are often near their peak, leaving minimal room for significant appreciation.
REALITY: Location though important should be considered along with other factors including project type, builders’ reputation and market-specific trends.
STOCK MARKET VS REAL ESTATE
One question that never goes out of fashion is “Should I invest in stocks or buy property?”
In the recent years, both stock market and real estate have created millionaires worldwide. What is important to understand, is that both these wealth building tools work differently and suit specific investor types. Stock Market Wealth Creation: In 2025, stock markets have been hitting new highs with equity mutual funds seeing all-time high inflows. Monthly SIP contributions crossed Rs 28,000 crore in mid-2025, showing retail investors confidence. The benchmark indices like Nifty 50 have delivered double-digit annualized returns in long run and diversified mutual funds and ETFs have made investing ever more accessible to layman. Real Estate Wealth Building: In 2025, property markets across major cities from tier 1 to tier 2 and 3 have seen sharp price increase yielding attractive capital appreciation of property value and rental income. NHB Index confirms double-digit price appreciation in several key micro-markets as well as improved rental demand, especially near employment hubs and infrastructure corridors of the country.
MYTHS & REALITY CHECK
Stock market is most suitable to those who prefer liquidity and flexibility, such as the young investors looking for higher long-term returns, are comfortable with market ups and downs and want to invest small amounts via SIP. For those that are more comfortable with investing in a tangible asset and can handle EMIs, prefer real estate that can be deployed for self-use, while it keeps growing in value or for rentals for immediate returns along with capital appreciation. As mentioned earlier, property prices do not always appreciate and can stagnate or go down, if there is an oversupply in a market and likewise stock market does not always give high returns and can fluctuate up and down drastically, especially during a major event. Remember, smart investors build wealth through diversification. Stock market participation can be the core wealth creation tool and carefully chosen real estate investment will offer stability and tangible value.
Don’t wait to buy real estate. Buy real estate and wait.” – Actor Will Rogers
WEALTH BUILDING WITH REAL ESTATE
The Indian real estate market has gone through a paradigm shift in the last ten years, with the introduction of regulator reforms and the technology penetration. The recent GST and budgetary reforms have further elevated the market fundamentals, shifting investment patterns. Here’s the catch: real estate trends do not move in one straight line. Real estate is very regional and even micro-market specific, behaving vastly different depending on the market, location, and product. An example is the stagnant prices in some of the most upmarket localities of the top seven cities, while suburban areas experiencing accelerating property prices. Or for that matter, some smaller cities giving better property appreciation than the metro cities. Invest smartly by considering the latest market trends, RERA gives protection to buyers but is limited in its redressal mechanism. Therefor due diligence and legal help is a must for any real estate investment, which is also true for any other financial instrument.
HOW TO LEVERAGE REAL ESTATE AS WEALTH-BUILDING TOOL
Diversification is the key to building wealth through real estate. As a part of your overall financial portfolio, it helps build a resilient investment plan that also provides tax benefits, related to home loan and property taxes. In addition, real estate can build wealth through rental income, providing a consistent income stream. Property is a physical asset, less prone to small time volatility, a proven hedge against inflation and the appreciation of the property over time, builds substantial wealth creation.
- According to a 2024 Homebuyer Sentiment Survey by FICCI and Anarock, real estate remains the most preferred asset class for investment.
- 59% respondents favour real estate over stocks & gold
- 67% buyers seek property for end use, while 33% to invest
- 57% investors are buying property to earn rental income
Where to Invest
- Tier-2 cities are emerging as growth hubs due to improved infrastructure, job opportunities, and more affordable pricing compared to major metros. This makes a strong case for better property appreciation.
- The booming luxury real estate market driven by high demand from HNIs and NRIs is a segment that can give high rental income.
- The ever-expanding commercial real estate seeing robust office space demand from IT BFSI, ITeS and GCCs, makes it a lucrative investment segment for long term returns.
- The thriving industrial and warehousing segments due to e-commerce growth offer stable passive investment avenue.
- The rise in shared rental housing demand from students and young professional is fuelling demand for Co-living & Student housing and promises better rental income than traditional house rents.
- Buying land on the outskirts of the city, especially in a gated plotted development offer hassle free investment opportunity at an affordable rate.
WEALTH BUILDING APPROACH
It goes without saying, investors should adopt a strategic, data-driven approach based on their personal financial goals.?
- The risk averse investors looking for steady income source, 2 BHK flat in an urban locality or in developing tier 2 cities in a good society or locality will ensure good rent and appreciation.
- For long-term investors, properties in high-growth industrial corridors or tier-2 cities make better investment option so as to leverage future infrastructure development for capital appreciation.
- The retail investors with less investing capacity can enter the real estate market through REITs to leverage high rent yielding commercial real estate for steady income with less risk and no active involvement.
- To build high value investment portfolio, risk-tolerant investors can explore early-stage investment in yet to be developed smaller cities on propose infrastructure corridors that will entail less capital but higher appreciation.
FINAL TAKEAWAY
No doubt, whether it was our forefathers yesterday or the millennial today, real estate remains a legitimate wealth building tool in India. The important fact to keep in mind is that it is not a passive or guaranteed path to riches. Despite lower returns than equity market and higher risks, real estate remains popular because firstly, homeownership is every Indian’s aspiration and secondly owning a physical asset as investment makes people feel secure. Land especially, unlike a building does not depreciate over time. And its value usually appreciates, thanks to its finite nature. Moreover, if the location witness’s infrastructure growth, property prices can increase substantially, which has been the case for many property buyers who bought a property in a once underdeveloped location at below market rates. Finally, Indian real estate has evolved beyond simple homeownership or land investment. The new investment formats, technology advancements, regulatory reforms, global exposure and shifting demand drivers have opened up many new avenues for all kinds of investors. The success of real estate investment now depends on your informed research, strategic approach and a careful assessment of market trends.
Smart investors build wealth through diversification. Stock market participation can be the core wealth creation tool and carefully chosen real estate investment will offer stability and tangible value.
