Real Estate Sector Generates Highest Yielding Income
In the last two decades alone, the recent study by Cians Analytics during the year 1991 to 2013 highlights the importance of real estate and equity investments as it generates the highest returns of up to 20% to investors.
Five type of asset classes are covered in this study namely, equities such as BSE Sensex, commodities like gold, bank fixed deposits and government securities having a 1 to 3 year and 10 year maturity period respectively, and real estate. This was aimed at finding out which asset would bring out the best investment returns since the onset of the liberalisation process in 1991.
Judging by the overall returns, the study has concluded that the real estate sector has surpassed all other asset classes during this period, especially since it has an annualised rate of 20%. Coming in second is the healthy annual return of 15.5% in the stock market belonging to the equity asset class, although the real return is only 7.1% once inflation costs have been deducted.
During the 23 period, other assets such as gold, government securities and fixed bank deposits accumulated comparatively lower rates of return of 10.9%, 9.7%, and 8.8% respectively. This further proves that real estate was the best performer having the highest return of 670% during 2008 to 2012 and the lowest return of 46% during 1993 to 1997.
The average land rates during 1991 to 2006, and circle rates from 2007 onwards set by the land and urban development authorities for residential property in Delhi, is the basis of real estate sector measurement. As there is a dearth of reliable data from 1991, these values have been used a proxy for real estate prices. The study assures that rental yields have been obtained from many new report sources for the respective period.
Source: Financial Express
BSE Sensex, Highest Yielding Income, Indian real estate sector, liberalisation process, liberalisation process in 1991
