THE ILLUSION OF WEALTH CREATION: RISKS IN INDIAN REAL ESTATE INVESTMENTS AND DIVERSIFICATION THROUGH BONDS AND MUTUAL FUNDS

Finance

The Indian real estate market is often seen as a reliable wealth-building avenue, driven by urbanization, economic growth, and cultural preferences for property ownership. However, this perception overlooks key risks such as market volatility, regulatory challenges, high capital requirements, and liquidity constraints, leading to financial uncertainty. Many investors overestimate real estate’s profitability while underestimating cyclical downturns and hidden costs. This study critically examines these risks and explores diversification through bonds and mutual funds as a strategic alternative. Unlike real estate, these financial instruments offer greater liquidity, lower transaction costs, and more predictable returns, enhancing portfolio resilience. By analysing historical trends, risk factors, and financial performance, this research highlights the advantages of a diversified investment strategy. The findings advocate for a balanced approach that integrates real estate with diversified assets, promoting sustainable wealth accumulation and long-term financial security.

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