In uncertain times, which is a better investment: gold or real estate?

By Bricksnwall | 2025-04-12

According to personal finance experts, your objectives, risk tolerance, and time horizon will determine whether you should invest in gold or real estate.

Investors are looking for safe-haven assets as a result of the global market volatility brought on by US President Donald Trump's tariff plans. While real estate continues to be the go-to choice for building long-term wealth, gold has historically been seen as a dependable hedge during turbulent economic times.

Gold produced remarkable gains of more than 20% in 2024, highlighting its potency as a liquid asset that is simple to obtain via digital channels and an inflation hedge. Investors looking for short-term safety and liquidity find it particularly alluring.

Conversely, real estate offers benefits like capital growth, rental income, and leverage potential.. It is regarded as a stable, long-term asset even though it usually demands a larger initial investment and is less liquid than gold.

Where, then, ought one to invest? Your objectives, risk tolerance, and investing horizon all play a role. Gold might be a better choice for stability in the near term. Real estate is unique for creating income and accumulating long-term wealth. According to personal finance experts, a diverse portfolio that consists of both can assist balance risk and reward.

What was the performance of the real estate markets?

The real estate market has shown selective performance in several areas during the past few months.

Strong equities market performance, where investors reinvested equity profits into larger homes or second residences, is one contributing factor. The demand was also boosted by stable and reduced house loan rates, which gave investors some peace of mind, according to Amar Ranu, Head of Investment Products & Insights at Anand Rathi Shares and Stock Brokers.

Over the past few quarters, luxury residences have accounted for nearly half of all sales. However, the demand for affordable housing decreased as a result of weaker urban spending and increased inflation.

To what extent is the real estate market liquid?

As an asset class, real estate has long been alluring. People feel more safe since it is palpable, and this frequently influences emotional decision-making.

"I think there is a very strong, but false, belief that real estate doesn't decline. In actuality, it does decline, but not in the same way as stocks. Liquidity makes it fall. Sometimes you just can't sell anything at all or at the price you want. Investors tend to ignore that important truth. Real estate is not even comparable to the stock market, which is extremely liquid, according to Amit Suri, director and chief executive officer of the financial services company AUM Wealth.

The gleam of gold

In recent years, gold has obviously outpaced real estate. However, it is important to view this performance in its context. "Gold is a hedge, not a growth asset. The recent surge relates to inflation protection, global anxiety, and uncertainty. The quick surge typically leads people to believe that gold is a high-return investment, but this is frequently a classic example of recency bias, according to Suri.

As a result, gold has recently outperformed the returns of the majority of other asset classes, making it a delight for investors. "Gold has been routinely bought by central banks around the world to replace US dollar investments, especially US treasuries. In the near future, this tendency appears to be irreversible, according to SEBI Registered Investment Advisor Gaurav Goel.

Is it better to limit your investing to stocks?

In periods like those, many investors are debating whether to continue investing in stocks or to move a portion of their portfolio into assets like gold or real estate. For investors with a lengthy time horizon and a high risk tolerance, stocks have traditionally produced higher returns than other asset types. According to Amar Ranu, Head of Investment Products & Insights at Anand Rathi Shares and Stock Brokers, "equities have the potential to provide significant growth over the long term, despite their short-term volatility."

Source: Hindustan Times