Real Estate: A Shining Star in Turbulent Economic Times
Real estate investments have emerged as a reliable hedge against inflation, with housing prices appreciating by 13% CAGR over the last two years.
Real EstateInflationHedgeInvestmentAnarockReal EstateJun 13, 2024
Inflation, which gradually increases the general prices of goods and services, erodes the purchasing power of money. However, real estate investments offer a tangible asset with intrinsic value, generating rental income and adding value through capital appreciation. As Anarock emphasized, inflationary pressures can actually increase the value of real estate investments, making them an attractive hedge against inflation.
Consistent urbanization, combined with steady population growth, has spurred housing demand, leading to a rise in residential prices. Real estate investments generate rental income, which potentially grows over time in response to inflation. Landlords typically adjust rental rates as the cost of living rises, ensuring that investors can keep pace with inflation.
Moreover, real estate assets can also be leveraged to borrow funds for more acquisitions, providing investors with a valuable source of financing. According to Shobhit Agarwal, Managing Director and CEO of Anarock Capital,
Frequently Asked Questions
Why is real estate considered a hedge against inflation?
Real estate investments generate rental income and add value through capital appreciation, which can keep pace with inflation, thereby protecting investors' wealth from erosion.
How has urbanization affected the real estate market?
Consistent urbanization has spurred housing demand, leading to a rise in residential prices and rents.
Can real estate assets be used to borrow funds for more acquisitions?
Yes, real estate assets can be leveraged to borrow funds for more acquisitions, providing investors with a valuable source of financing.
How has real estate performed compared to inflation in recent years?
According to Anarock, housing prices have appreciated by 13% CAGR over the last two years, outperforming CPI inflation, which has moderated to 5.4% at the end of FY24.
What is Anarock Capital, and what services does it offer?
Anarock Capital is the investment arm of Anarock, offering a range of services, including investment advisory, asset management, and capital markets.
Related News Articles
UBS to Liquidate Struggling Real Estate Fund Amid Market Turmoil
UBS Group AG is liquidating a flagship real estate fund due to high redemption requests, exposing the turmoil in commercial real estate markets.
RERA Cases Weekly Roundup: August 5 to August 11, 2024
RERA directs builders to pay interest to homebuyers for delayed possession, refund amounts paid, and imposes penalties for selling unregistered projects.
Fractional Ownership in Indian Real Estate Gets a Boost with Property Share's SM REIT License
The introduction of SM REITs is expected to transform the Indian real estate investment landscape by allowing smaller investors to engage in a market that has long been dominated by larger players.
Pune Rural Police Seize 98 Kilograms of Cannabis, Arrest Four Individuals
Pune Rural Police arrested four individuals on Thursday while they were transporting 98 kilograms of cannabis from the old highway to Lonavala.
Arkade Developers IPO Sees Overwhelming Response with 106.40 Times Subscription on Final Day
Arkade Developers, a fast-growing real estate development company with a significant presence in Mumbai, has seen its initial public offering (IPO) subscribed 106.40 times on the last day of the offer.
Supreme Universal Unveils Phase 2 of Supreme Villagio in Pune
high net worth individuals, Indian real estate, luxury real estate, luxury villas, NRI investors, property development, Property Launch