Real estate vs equities, REITs and mutual funds: Can real estate find a place in Gen Z’s wealth creation strategy?

Gen Z investors are entering the market with access to a wider range of investment products than previous generations, from equities and mutual funds to REITs, exchange-traded funds and digital investment platforms. This has changed the traditional role of real estate in wealth creation, with younger investors increasingly weighing property against alternatives on parameters such as liquidity, returns and flexibility.

According to Gaurav Mavi, co-founder of BOP.in, real estate can continue to have a role in a diversified portfolio, but young investors are approaching property differently from earlier generations. Rather than treating a home or property as the default first investment, they are increasingly evaluating it alongside other asset classes.

The shift comes as India's residential property market continues to see substantial demand. Knight Frank estimates that more than 3.48 lakh homes were sold across India's eight major residential markets in 2025. Premium housing also increased its market share during the year, indicating continued demand for higher-value properties.

Delhi-NCR recorded strong price appreciation, with prices rising by close to 10% annually across several micro-markets, according to the data cited by Mavi. Infrastructure development has also emerged as an important factor influencing residential and commercial investment decisions across the region.

Liquidity, however, remains a key consideration for younger investors. Career mobility, entrepreneurship and frequent relocation can make locking a large portion of wealth into physical property less attractive, particularly early in an investor's career.

The expansion of fractional and listed real estate products is addressing some of these concerns. SEBI introduced the Small and Medium REIT (SM REIT) framework in March 2024, providing another route for investors to gain exposure to real estate without directly purchasing an entire property.

Mavi, citing ICRA data, said India has nearly ₹5,000 crore of assets managed through fractional ownership platforms, while completed office assets worth an estimated ₹67,000 crore–₹71,000 crore could potentially be monetised through SM REIT structures.

Physical property, meanwhile, offers characteristics that financial assets may not replicate directly, including rental income, tangible ownership and the ability to use borrowing to finance a larger asset. However, these benefits come with considerations such as transaction costs, maintenance, leverage risk and lower liquidity.

Infrastructure-led development is another factor shaping property investment decisions. Corridors around Dwarka Expressway, Yamuna Expressway, Greater Noida and the Noida International Airport are seeing increased residential and commercial activity as connectivity and economic infrastructure expand.

For Gen Z investors, the emerging approach is therefore less about choosing between property and financial assets and more about combining different asset classes. Real estate may form part of that allocation, with the suitability depending on factors such as income, investment horizon, liquidity requirements, risk tolerance and the quality and location of the property.

The broader shift is towards portfolio-based wealth creation, where physical real estate, listed REITs, equities and other financial instruments can serve different objectives rather than competing for the same role.