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Property rental yields in India lowest in the world
Jan 21, 2016

We all want our investments to fetch us regular income. And if possible, also to appreciate in value over the years. Sometimes though, investors get so enamoured by a particular asset class, they forget the importance of the first step, and directly jump to the second step.

Real estate has for long been one such asset class in India. It has been one of the preferred places for investors to park big money. However, all of the emphasis on property price appreciation has meant that rental yields - annual rental income as a percentage of the property's purchase price - have fallen to abnormally low levels.

In fact, as the chart of the day highlights, rental yields in India are possibly among the lowest in the world. At 2.2%, it means that investors get next to nothing in terms of income. Consequently, for good returns, the entire reliance is on property price appreciation. And history tells us that this is not always a given. Up is not the only direction prices move in here.

Data Source: Times of India; Global Property Guide

This Chart Of The Day was published in The 5 Minute WrapUp - How to Win Your Fight against the Stock Market

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