Realty tops list of investment choices, post 7th Pay Commission salary hike

Post the recent 7th Pay Commission salary hike announced recently, property has emerged as the leading investment avenue among serving and retired government employees surveyed across 20 Indian cities by a realty think tank group.

The survey was carried out among a carefully selected demography of government employees across categories. Cities included in the survey were Delhi, Noida, Gurgaon, Ghaziabad, Mumbai, Pune, Nagpur, Nasik, Ahmedabad, Bangalore, Chennai, Hyderabad, Coimbatore, Kochi, Kolkata, Bhubaneswar, Jaipur, Bhopal, Lucknow and Patna.

As per the results of the exhaustive survey, approx 44% of government employees pan-India have expressed a desire to invest the gains of their hiked salary into the realty market.  About 34% expressed a desire to invest in schemes that would secure their retirement, 12% for the education and marriage of their children, while 10% wished to use the money to improve their lifestyle.

Interestingly contrary to popular opinion that the realty market is now attracting a younger profile of buyers, a whopping 78% of those inclined to invest in realty were officials on the verge of retirement. About 74% respondents showed preference for investing their monies into buying homes in emerging markets and peripheral locations.

However the shortage of affordable housing options and rising inflation have emerged as the key factors hindering people from investing into realty.

The results of the survey have reiterated the fact that cheaper locations in peripheral areas and emerging markets are now increasingly become the preferred destinations for 74% people looking to viable investment avenues post retirement.

While the lower costs is the main contributing factor, other reasons that can be attributed for this trend include the opportunity to lead a relaxed and quality lifestyle and a potential rise in capital values over time.

Interestingly nearly 74% people who expressed a desire to invest in property did not currently possess a house of their own. Approx 22% wanted to invest in realty to secure a regular income while a minuscule 4% were keen to park their monies in a weekend / holiday home.

Again it’s the older generation (78% of people over 45 years of age) that have shown a propensity to invest in realty, while one-fourth of younger employees (approx 22%) who took part in the survey preferred to spend the cash to upgrade their lifestyle prior to looking at other long term investment avenues.

While realty has emerged as the clear winner among investment options, financial schemes offering fixed returns also found many takers with approx 34% respondents wanting to invest n them post retirement.

With inflation on the rise about 12% employees voiced plans to save their pay commission gains towards meeting the education and marriage expenses of their children while another 10% wished to upgrade their lifestyle with the money.

Quizzed about the impact of the Pay Commission recommendations, less than one-third of those surveyed opined it would help improve consumer sentiments, voicing concerns over lack of quality affordable housing options (55%) and inflation (45%) nullifying the gains.