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Real estate as an investment? No

The NHB's real estate price index (Residex) is out and we have some compelling figures to support the above headline


Real Estate returns were always hard to compare with equity or other asset classes simply because of a lack of data. The National Housing Bank's Real Estate Price Index (Residex) offers a remedy to this problem. This index has recently been updated by the NHB. The data has reinforced something we've already known - real estate is a poor investment.

Category Returns (CAGR)
Real estate 5.2%
Equity: large Cap 15.3%
Equity: multi-cap 19.4%
Nifty ETF* 11.8%
*Reliance ETF Nifty BeES, one of India's oldest and largest Nifty ETFs, has been taken for reference.

Whilst even longer data would offer a better picture, a shift in the Residex's base year from 2007 to 2013 makes this difficult. Nonetheless, here's how returns from real estate in different cities over the past four years compare with equity.

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