Future of real estate - as compared to Banking, stock market, gold
Before comparing the future of the real estate, stock market, and gold, let’s get a glimpse of what they are!
Real estate investment involves the purchase, ownership, management, rental, or sale of real estate for profit.
The stock market is a share market, however, besides shares of companies, other instruments like bonds, mutual funds, and derivative contracts too are traded in the stock market.
The future of real estate in comparison to the stock market and gold is very bright. This can be predicted by seeing the growth and development in cities across different continents as well as grooming the cities for wealth creation.
This will boost opportunities in the respective sector. Overall, total construction output globally is projected to reach a whopping $15 trillion by 2025.
The Bank of International Settlements analyzed these economies found that house prices in the US are going to be deflating (about 80 basis points per annum in real estate prices over the next 40 years).
Effect of population increase
It is noticed and surveyed that by 2025, the population of middle-class people will rise by 1 billion. Connecting this, it will increase the demand for affordable houses. Middle-class people will own a house compared to saving amounts, investing in the stock market, or buying gold.
With an increase in population, there will be more demand for healthcare facilities, hospitals with a simultaneous increase in the requirement of industries and agriculture, which will boost the industrial as well as the agricultural sector.
On the other hand, it is objectified that the gap between the richer section and the poor section of the society keeps on increasing.
The richer section of society will tend to buy gold creating a hike in its prices.
Concluding, the only section left is the middle-class society, for whom it will be unaffordable to buy a good amount of gold as well as a major part of them won’t desire to take the risk of investing in the stock market.
Effect of increase in the industrial sector
As the population growth will give a hike in the industrial sector, the stock market will go through more ups and downs due to the introduction of more industries in the market.
Resulting in a small portion of the population taking the risks to invest in the stock markets.
The increasing need for eco-friendly homes and environment
It’s projected that by 2050, the world will need 50 percent more energy, 40 percent more water, and 35 percent more food to sustain the population.
As we can see from the changing environmental needs, adaptation accordingly will give a huge effect on the real estate sector.
The major part of the population will desire to have a house with an eco- friendly, green surroundings.
Effect of technology on real estate and stock market
The use of blockchain and cryptocurrency is increasing with the increase in time. Almost 90% of the industries taking their business online will too affect the real estate as well as the stock market.
Blockchain is simply the technology behind bitcoin and other cryptocurrencies. This technology can be designed to support any type of transaction.
Now the question is, How?
With the increase in technology, real estate will completely shift towards technological ways of transactions.
This will make real estate transactions easy to conduct and more people will prefer to shift towards investing in real estate rather than stock markets.
What you prefer tangible property or an intangible property
You buy an intangible property when you invest in the stock market, whereas you buy a tangible property when you invest in real estate as well as gold.
First and foremost, the difference between the two tangible properties i.e. gold and real estate is people prefer to invest in real estate in comparison to gold, due to its longevity, expansion, and further benefits which can be achieved by renting the property.
On the other hand, the difference between investing in real estate and the stock market can be viewed keeping in mind the following things.
First, Debt for real estate is easier and less risky in comparison to the stock market. Secondly, real estate is appealing because it is a tangible asset that can be controlled, with the added benefit of diversification.
On the basis of accountability:
Based on accountability, it can be observed that having a physical property is more accountable than having a virtual property as it involves more risk. The increase in population and the simultaneous increase in population will end up shifting people’s interests more towards spending in real estate than the stock market.
In conclusion to this, we can say that comparing the three variables – real estate, stock market and gold, investment in real estate is far more profitable and will be on its peak in coming future.
