During the pandemic, interest rates were brought down and the government poured money into the economy by way of various projects that fueled an economic boom pretty fast.
Smarter people bought real estate when the government announced these steps and didn’t wait for anything to start investing.
Everything seemed grim, and they just went ahead and started shopping for properties.
They have benefitted the most. At the same time, a lot of people invested in the stock markets and saw their investments double, triple, or quadruple in the next year or so, depending on how and what they invested in.
STOCK MARKETS HIT A HIGH:
But once the stock markets hit a high, a lot of these stock market investors sold off their equity portfolio, or part of it, and bought some properties.
These properties had not gone up much yet and were still at the beginning of their boom.
Let’s say they had gone up by 20–40% from their bottoms, unlike stocks that had skyrocketed already, as stock markets go up and down very fast.
So these people enjoyed excellent returns from their stocks, sold their stocks, and then bought real estate. This real estate then started climbing very fast.
At some point, the stocks fell, and people who had not sold their stocks earlier (waiting for more returns) got stuck in the stock market and watched real estate take off. They missed this real estate rally.
STOCK MARKET STAYED DOWN:
As stock markets have stayed down for almost a year, they have gotten tired of it.
A lot of them are waiting for the stock market to hit the top again so that they can sell the stocks and finally invest in real estate, which, after all, is REAL.
Many hope to just buy a house or a larger apartment and put their money into real estate and also enjoy it.
STOCK MARKETS HIT HIGHER ALL TIME HIGH:
If stock markets hit higher all-time highs, which I believe they will, then these people waiting to sell will finally exit stocks and buy properties, propelling real estate higher.
Once this starts, others waiting on the sidelines will start buying too, as more people want to buy in a market going up for the fear of losing potential profits.
This will compound the prices going up, and it’ll create a huge wave. This will be the second wave of the real estate bill market.
CENTRAL BANKS AROUND THE WORLD RAISING INTEREST RATES:
With central banks around the world raising interest rates and selling bonds, reducing the amount of cash in the market, stock markets will have to crash.It’s either this or hyper inflation, and no government can risk hyper inflation.
So the next few years will be bad for stock markets globally, most likely.
This should keep Indian stock markets weak as well.
At the same time, India is still plush with cash and demand in India is way beyond the supply available for everything.
If you don’t believe this, check the market for cars, houses, hotel rooms, luxury items, etc.
All this cash will leave real estate as the best option, as at least it is real and gives some rental returns.
Add to that the love of having your own home; property being a status symbol; and loads of black money looking for a safe haven.
All this should keep property slowly rising and at least not going down despite higher interest rates in India.
CONCLUSION:
This is not investment advice and please do your own due diligence and buy or sell anything at your own risk.
These are simply my viewpoints based on extensive study and research, and I do not take any responsibility for any loss or profits you make based on this.
I hope you do what’s best.
Many people sold stocks and bought properties, which also shot up from there. Those who couldn’t feel they made a mistake and missed the rally.
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