For Shweta Shankar, a Bengaluru-based IT professional in her early forties, real estate was the primary asset of choice soaking up nearly all her net worth, save the customary fixed deposits she had for any surplus cash. Investments in realty, she believed, are safe and a reliable long-term wealth creator; an ideal choice for her family’s future.
However, asset prices and returns change over periods; over-allocation to one asset can be disadvantageous. Bank fixed deposits, for example, offered 9% on a 1-year deposit back in 2014; today you get only around 6.5-7% for the same. As is evident with recent residential real estate prices across big and small cities in India, it’s hard to tell when a price correction might come or how long it will stay.
