Why Individual Investors Are Snubbing Real Estate Over Mutual Fund?

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The wealth management is seemingly witnessing a paradigm shift. Real estate, which used to be most sought-after investment and somehow the most basic one too, is losing its sheen.

Real estate has been the prime investment avenue since ages in India, so much so, that having a house or piece of land was not considered an investment but a necessary stepping-stone of adult life.

However, over past one year, real estate has taken a back seat giving way to mutual funds. As per the AMFI data, assets managed by the Indian mutual fund industry underwent a growth of 7.72 percent from July 2018 to July 2019 to stand at Rs 25.81 trillion; more than half of which belonged to individual investors, Money Control reported.

Investors of today are better informed and aware. They want to boost returns on investment and has found their solution in the mutual funds industry. The convenience and simplicity of investing, AMFI’s ‘Mutual Fund Sahi Hai’ campaign, ease and access to investments due to digitization, growing penetration of smartphones coupled with affordable high-speed internet have further helped in attracting individual investors to a great extent.

The breaking of the myth that one needs a large amount to start investing in mutual fund has also helped the segment to attract first-time buyers from B30 cities to participate extensively in mutual funds.

On the other hand, real estate segment is plagued by a slew of problem of its own. The individual investors started deviating from real estate during the onset of its slowdown owing to the growing number of stalled under-construction projects. Demonetization only further made investors to stay away from real estate for a long time.

The slowdown in real estate impacted to return on investment as well. When most Indian cities is seeing a dip in return on investment, investors are not very eager to put their money in this avenue.

Real estate investment was never an easy and hassle free one. It requires your time and energy along with knowledge about the usage and location while investing in mutual fund has become not only more profitable but also easier.

Read on for more trends in real estate.


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