Real estate or gold—What’s the best investment in uncertain times?

In 2024, gold delivered impressive returns of over 20%, underscoring its strength as an inflation hedge and a liquid asset—easily accessible through digital platforms. It’s especially appealing to investors seeking short-term safety and liquidity.

Real estate, meanwhile, offers benefits like capital appreciation, rental income, and leverage potential. While it typically requires a higher upfront investment and is less liquid than gold, it’s considered a stable, long-term asset.

So, where should you invest? It depends on your goals, risk tolerance, and investment horizon. For short-term stability, gold may be the better option. For building long-term wealth and generating income, real estate stands out. Ideally, a diversified portfolio that includes both can help balance risk and reward, say personal finance experts.

Real estate markets – how did they perform?

In the last few months, the real estate market has performed selectively in different pockets.

“One attributable reason is strong equity market performance where investors reinvested equity profits into bigger houses / second homes. Additionally, lower and stable home loan rates fuelled the demand as it provided some certainty to investors,” says Amar Ranu, Head – Investment Products & Insights, Anand Rathi Shares and Stock Brokers.

Luxury homes dominated the major portion of sales in the last few quarters, almost contributing more than 50% mark. On the other hand, affordable housing demand slowed down due to high inflation and slower urban consumption.

How liquid is the real estate market?

Real estate, as an asset class, has always had a magnetic pull. Its tangible nature makes people feel more secure, which often drives decisions emotionally.

“I believe people have this very strong but incorrect perception that real estate doesn’t fall. In reality, it does fall, but not in price terms like equities. It falls through liquidity. Sometimes, you simply can’t sell it at the price you want or at all. That’s a crucial fact that investors overlook. Compared to the stock market, which is highly liquid, real estate is not even comparable,” says Amit Suri – Director & CEO – AUM Wealth, a financial services organisation.

At times, people shift money out of equities into real estate, but often, that’s more emotional than logical. So, to some extent, this trend does exist. But it’s driven mostly by perception, not planning. And that’s what makes it more of a behavioural pattern than an investment strategy.

The glitter of gold

Gold has clearly outperformed real estate in the recent past. But this performance needs to be seen in context. “Gold is not a growth asset; it’s a hedge. The recent run-up concerns global fear, uncertainty, and inflation protection. People tend to look at the sharp spike and think gold is a high-return asset, but that’s often a classic case of recency bias,” says Suri.

Gold has thus been an investor delight in recent times and has outsmarted returns of most other asset classes. “Central banks, world over, have been regularly purchasing gold as a replacement to US dollar investments particularly US treasuries. This trend looks irreversible in the short term.” says Gaurav Goel, a SEBI Registered Investment Advisor.

Gold has given 19.3% return in 1 year and 15.9% return in 2 years respectively as on 31st Dec 24. Gold continues to roar due to uncertainty globally; in YTD 2025, gold has generated 15.8% as on 08th Apr 25.

Gold or real estate?

Gold and real estate each have their merits, depending on your goals, time horizon, liquidity needs and risk appetite. Gold has recently outperformed with over 20% returns in 2024, making it a strong hedge against inflation and uncertainty, plus it offers high liquidity and easy access through digital platforms.

Real estate, on the other hand, offers long-term capital appreciation, rental income, and leverage opportunities, though it requires higher capital and is less liquid.

“For short-term safety and liquidity, gold is preferable; for long-term wealth creation and income generation, real estate may be better. A balanced portfolio could include both, with 10–15% in gold and real estate based on individual financial goals,” says Yogita Dand, Certified Financial Planner & Registered Mutual Fund Distributor, Svarasa, a financial planning firm.

Should you stick to equity investments?

Many investors are considering whether to stick with their equity investments or shift some of their portfolio into assets like gold or real estate in times such as there. “For those with a long-term horizon and a high-risk tolerance, equities have historically provided higher returns compared to other asset classes. Equities can be volatile in the short term, but over the long run, they have the potential to deliver substantial growth,” says Amar Ranu, Head – Investment Products & Insights, Anand Rathi Shares and Stock Brokers.

Also Read: RBI MPC Repo Rate Cut: Homebuyers should ensure income stability before investing in real estate

Ultimately, the decision depends on individual goals. Investors seeking long-term growth and willing to ride out market volatility may find equities to be the best choice. Investors should prefer equities over gold or real estate due to higher long-term returns, liquidity, and compounding growth. “Equities offer better protection against inflation and are easier to buy or sell compared to real estate, making them a stronger choice for long-term wealth accumulation,” adds Ranu.

Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics