Real Estate Investments : In 23 Years Returns 20%

Real estate, equities give maximum returns in past 2 decades:

Study According to a recent study by Cians Analytics on the returns from various asset classes in India during 1991 to 2013, real estate and equity market have given maximum returns to investors.

The study covers five types of asset classes:

1. Equities (BSE Sensex)

2. Commodities (Gold)

3. Bank fixed Deposits (1-3 year maturities)

4.  Government securities (10-year maturity)

5. Real estate.

It was aimed at finding out which asset class would have provided the highest return since the liberalisation process commenced in 1991. Looking at the overall returns, the study noted that "real estate appears to have outperformed all other asset classes during the 23 year period with an annualised rate of 20%. However, adjusting for inflation, the real return is 11.6% per annum

After real estate, equities have also performed strongly in India as the stock market gave a healthy annualised return of 15.5% on a nominal basis during the past 23 years.

However, adjusting for inflation, the real return is only 7.1% per annum. The study also explored gold, government securities and fixed deposits at banks, which were found to have posted comparatively lower returns of 10.9%, 9.7% and 8.8% respectively for the 23-year period.

"Real estate was repeatedly the best performer during the 5 year sub-periods since 1991, with the highest return being 670% during 2008-12 and the lowest 46% during 1993-97,"

the study noted.

It said that the realty sector performance has been measured based on the average of the land rates (1991-2006) and circle rates (2007 onwards) set by the land and urban development authorities for residential property in Delhi. These have been used as a proxy for real estate prices since reliable data is not available for the period since 1991.

Furthermore, the rental yields have been sourced from various new reports for the respective periods, the study said.

It said that the realty sector performance has been measured based on the average of the land rates (1991-2006) and circle rates (2007 onwards) set by the land and urban development authorities for residential property in Delhi.

These have been used as a proxy for real estate prices since reliable data is not available for the period since 1991. Furthermore, the rental yields have been sourced from various new reports for the respective periods, the study said.

In 23 Years  Returns..

Real estate 20%

Equities (BSE Sensex) 15.5%

Commodities (Gold) 10.7%

Bank fixed Deposits 8.8%

Government securities 9.7%

For more details

http://www.ciansanalytics.com/

info@ciansanalytics.com

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