High net- worth individuals (HNIs) have excess money. Yet they find no proper place to invest it as the real estate market fails to give them higher returns. For them real estate investment has become unsafe.
High net- worth individuals (HNIs) always look for income generating assets. They are least bothered about the fluctuations in the economy. High net- worth individuals’ (HNIs) real estate investment was always well- known. As any others they also preferred real estate investment to all other forms of investment.
Real estate investment was the best form of investment up to the recent time. Yet now there are many who say that the profit in the real estate dealings is lower. The increased cost of properties cut short the aspect of profit to a great level. This reduces the investors’ interest.
Real estate was and had been consistent in providing higher returns to the investors. Yet it has become a matter of doubt whether it would remain as the best investment option in future. The available data shows that the real estate investment is not as attractive as it was.
There was a comparative fall in the value appreciation of properties. This loss of appreciation was higher in big cities and metropolitans. What cause the fall of price appreciation.
Real estate experts say that the value has already reached the zenith. The present value itself is not affordable to the majority of the people. As a result the home buyers resist the hike of prices in the property. So they are forced to reduce their prices or remain unable to sell out their properties. In both ways the property prices lose appreciation.
HNIs, according to a standard definition people with excess amount of Rs.2 Cr or above, get into action in the prelaunch period. They invest in the pre- launch phase of the project and quits once the project is completed. They normally exit with handful or higher returns. The pre- launch offers and discounts help them gain a better profit. The recent studies show that the HNIs are not able to exit with higher returns despite these pre-launch offers and discounts.
Cushman & Wakefield‘s executive managing director Sanjay Dutt says that the situation has got changed very much. He added that now the HNIs have to consider two aspects- the aspect of higher returns as well as the aspect of possible capital appreciation.
The exit has become a serious concern for all the HNIs. Due to the lack of demand investors are not able to exit with profit. A recent study has revealed that a half of property buyers in Mumbai are investors. However the sluggish real estate market chases the investors away. Now most of them opt for private equity investments or some other similar ways other than real estate.