Gold and Real Estate is believed as safe asset class for investment. People invest in Gold and real estate considering fact they are not likely to lose their money. However year 2014 was bad year for Gold and Real estate investors. Gold and real estate are coming out to be big losers of 2014.
Gold & Real Estate
Gold investors were quite happy as gold was giving magnificent return since 2008, but from 2013 onwards gold is giving negative returns. As per goldprice.org Gold gave negative return 18.7% in 2013 and 3.7% in 2014.
Gold was sold at 34,000 Rs/- per 10 gm in Aug, 2013 and today Gold is sold at 23,000 Rs/- per 10 gm. Overall investor has lost 25% in gold over a period of 15 months.
Gold price was highly volatile in last 21 months. Many gold analysts were predicting that gold will soon cross level of 35,000 Rs/- per 10 gm but that prediction was never turn out to be reality.
Major reason behind downfall in gold price is given below –
- Political stability and improvement in economic conditions.
- Fall in gold demand in the two biggest global markets of China and India.
- Investors are inclined towards equity and not investing in gold.
As per current feedback from various gold analyst fall in gold price will likely to continue further.
Real Estate Investor was quite unhappy this year as returns from real estate was very negligible this year. In some cities correction in range of 2-6% is observed, while in other price is becoming stagnant.
None of real estate destination are performing well except Delhi, Banglore, Hydrabad.
Major reason behind downfall in real estate price is given below –
- Due to increase in land cost and raw material cost overall cost in real estate has gone up.
- Excessive Real Estate supply in market compare to demand.
- People are preferring to live in rented house rather than purchasing new house.
- Home loan rates are same and no indication of reduction in interest rates.
As per current research real estate price is likely to remain stable for six month or so.
Do share your views on above!