 "Forget gold, real estate and equities have given highest returns in past 2 decades")
Investments made in the realestate and equities have given the highest returns of up to 20percent to investors in the last two decades, says a studyby Cians Analytics, which analysed the returns from various asset classes in India during 1991-2013.
The study covers five types of asset classes – equities(BSE Sensex), commodities (gold), bank fixed Deposits (1-3 year maturities), government securities (10-year maturity),and real estate.It was aimed at finding out which asset class would haveprovided the highest return since the liberalisation processcommenced in 1991.Looking at the overall returns, the study noted that"real estate appears to have outperformed all other assetclasses during the 23-year period with an annualised rate of20 percent."
After real estate, equities have also performed stronglyin India as the stock market gave a healthy annualised return
of 15.5 percent on a nominal basis during the past 23 years.However, adjusting for inflation, the real return is only 7.1percent per annum.
The study also explored gold, government securities andfixed deposits at banks, which were found to have postedcomparatively lower returns of 10.9 per cent, 9.7 percent and8.8 percent respectively for the 23-year period. “Real estate was repeatedly the best performer during the5-year sub-periods since 1991, with the highest return being670 percent during 2008-12 and the lowest 46 percent during1993-97,” the study noted.
It said that the realty sector performance has beenmeasured based on the average of the land rates (1991-2006) and circle rates (2007 onwards) set by the land and urbandevelopment authorities for residential property in Delhi. These have been used as a proxy for real estate pricessince reliable data is not available for the period since 1991. Furthermore, the rental yields have been sourced fromvarious new reports for the respective periods, the studysaid.
PTI