The other night, I watched a real estate influencer’s video showcasing Three Sixty West in Mumbai, the luxury towers by Oberoi Realty. To be honest, it was breathtaking.
The kind of project that feels more like New York or Dubai than Mumbai. World-class, aspirational, and of course, completely out of reach for most of us.
And yet, I keep seeing truckloads of such videos.
New towers in Mumbai, penthouses in Gurgaon, beachfront villas in Goa. The common thread is always the same: these homes are “investments”, prices will only go higher, and if you do not get in today, you will regret it tomorrow. It is a familiar chorus, and one that most Indians, including me, have grown up hearing.
I do own my place, and I understand the comfort of it. But when I look at the way conversations happen now about property as a guaranteed wealth creator, I find myself pausing. Because alongside the frenzy for physical real estate, there are also real estate stocks. Companies like DLF or Oberoi Realty, whose business is literally building and selling these apartments. Which raises the question: if Warren Buffett were Indian, would he rather buy an apartment in Gurgaon… or the shares of the company building them?
What Buffett Would Ask Before Buying Property in India
Buffett’s philosophy has always been simple: buy assets that produce cash and are backed by fundamentals, not hype. When he invests, he looks for businesses with strong cash flows, honest management, and a long-term moat. He avoids speculation built only on the hope that someone else will pay a higher price later.
If he were looking at Indian real estate, I believe his first question would not be “How much will the price go up?” but “What is the yield today?” Because the truth is, residential property in India often gives very poor rental yields usually 2 to 3 percent a year. That is far lower than what you can get from even a basic fixed deposit, and certainly lower than what strong businesses earn on their capital.
Buffett would also notice that the apartment you buy is just one illiquid, undiversified bet. Once you have put in ₹1 crore, you are locked in, with maintenance costs, taxes, and the uncertainty of when you can sell. By contrast, when you buy shares of a developer like DLF or Oberoi Realty, you are effectively owning a piece of many projects at once, with liquidity to exit any time.
And yet, stocks come with their own risks. Developers in India have a history of debt-fueled growth, cycles of boom and bust, and sometimes governance issues. Buffett has always said that management quality matters as much as the numbers. Would he trust the people running these companies with his money? That would be a serious question.
Buffett’s Likely Choice
If Warren Buffett had ₹1 crore to put into Indian real estate, would he buy a Gurgaon apartment or DLF shares? Knowing his style, the answer is not straightforward but it is revealing.
He would first look at the apartment. A ₹1 crore flat in Gurgaon might give you only ₹2 to 3 lakh a year in rent. After maintenance, taxes, and the effort of finding tenants, the actual yield is closer to 2 percent. That is the kind of return Buffett would dismiss as too low, especially when the investment locks you in and depends entirely on the hope that prices keep climbing.
Now consider DLF shares (As an example). At their best, they give you exposure to multiple projects, diversified locations, and the potential to ride India’s urban growth. But Buffett would not be swayed by glossy brochures or sales figures alone. He would remember that developers like DLF have had boom-and-bust histories, with shares that once fell more than 90 percent when debt piled up and the cycle turned. He would ask whether today’s profits are sustainable, whether the balance sheet is clean, and whether the managers running the show have earned the market’s trust.
And this is where Buffett might surprise us. Faced with frothy property prices and stocks already riding optimism, he would probably choose neither. He has always said there is no rule that you must swing at every pitch. Sometimes, the smartest move is to sit patiently with cash until the market gives you a true bargain an undervalued property, a discounted stock, or even an overlooked business that benefits from housing demand without carrying its risks.
That is the core of Buffett’s thinking: do not get carried away by stories or social media videos. Focus on cash flow, integrity, and price. If those three do not add up, walk away.
What Indian Investors Can Learn
In India, property has always been more than an investment. It is security, pride, and sometimes even social status. But if you bring Buffett’s lens to it, the picture changes. He would strip away the stories and ask only: is this asset really working for me? Does it earn enough today, and is the price fair for tomorrow?
For most Indians, that is where the gap lies. Apartments give comfort but poor yield. Real estate stocks give access to growth but carry risks of leverage and management quality. Neither should be entered blindly.
Buffett’s lesson is not that property is bad. It is that property, like any other investment, must clear the same hurdles of value and discipline. If it does not, you are speculating, not investing.
Key Decision-Making Points
- Yield matters: Check what the asset produces each year. An apartment yielding 2 percent is weaker than a stock or bond yielding 6 to 8 percent.
- Management matters: A company’s integrity is as important as its profits. If the people running it are not trustworthy, stay away.
- Price matters: Do not buy because everyone else is buying. Pay only when the numbers give you a margin of safety.
- Liquidity matters: Property ties you down for years. Stocks or REITs allow exits and diversification.
- Patience matters: You do not have to invest in every cycle. Sometimes the best decision is to wait until fear replaces greed.
The Indian obsession with real estate is unlikely to fade. But if Buffett were here, he would remind us of one simple truth: wealth is built not by owning what looks glamorous, but by owning what compounds value over time.
Author Note
Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.
Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.
The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.