Last Updated:
Experts advise first-time homebuyers to use diversified, inflation-beating investments and automation to strengthen down payment savings.
Don’t Let Inflation Erode Your Dream Home Fund, Say Real Estate and Finance Experts
Buying a first home is one of the biggest dreams for many middle-class families. It represents stability, security, and a sense of achievement. To turn this dream into reality, people often start by setting aside a portion of their income every month — a financial habit that gradually builds what’s known as a down payment.
But they often keep this down payment in the form of cash in either home’s locker or bank account. The idle cash often fails to beat inflation, which decreases its purchasing power over time.
Industry experts believe that by combining disciplined saving with inflation-resistant investments, first-time homebuyers can make steady progress toward homeownership, even in a volatile economy.
Real estate consultant Manoj Goyal, Director of Forteasia Realty Pvt. Ltd., said homebuyers need to reframe how they think about their savings. Instead of treating the down payment fund as a passive account, he said, it should be seen as an “inflation-fighting engine.”
He advised investors to move their money from low-yielding accounts to higher-interest options such as fixed deposits, high-quality debt mutual funds, and government bonds. According to him, these instruments not only help beat inflation but also build financial discipline. “The waiting period of a few months before buying should not be seen as lost time but as an opportunity to strengthen your financial foundation,” he said.
Experts also recommend spreading savings across different instruments to balance safety and growth. Ashawiny Dane, Founder of Dharagyan Academy and Nestoria Group, said that diversification is key for first-time buyers. She noted that short-term debt funds or fixed deposits can offer safety and stable returns, while SIPs and mutual funds provide long-term growth that outpaces inflation. “Micro real estate investments, such as small plots or pre-launch projects, can also help buyers build real asset value,” she said, adding that increasing the down payment can ease EMI pressure later. “Smart buyers don’t just save money — they make their money work for them,” Dane said.
Anurag Goel, Director of Goel Ganga Developments, said that with inflation eroding purchasing power faster than interest can accumulate, the focus should shift from simple saving to strategic financial growth. He suggested a two-pronged approach — using high-yield accounts and short-term fixed deposits for capital protection, and automating monthly contributions to enforce consistency. “This is what I call reverse compounding, where your interest earns interest,” Goel said, adding that disciplined automation can help buyers reach their target faster.
From a financial planning perspective, CA Manish Mishra, Founder of GenZCFO, said that although the U.S. Federal Reserve recently cut rates slightly, borrowing costs remain high compared to the pre-pandemic era. “This means homebuyers must be doubly cautious about where and how they park their savings,” he said. Mishra pointed out that traditional savings accounts, while safe, often fail to keep up with inflation. “High-yield savings accounts, Treasury bonds, and short-term certificates of deposit currently offer better returns without taking on excessive risk,” he added.
Mishra also highlighted the importance of budgeting and automation in the saving process. Using digital tools to track expenses, cutting back on non-essential spending, and redirecting bonuses or side income into a home fund can significantly accelerate savings, he said. “Inflation and high interest rates are challenges, but they also teach financial discipline,” Mishra added.
As Goyal put it, “The key is not just waiting for the right time to buy, but using that time to build your financial strength.”
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
November 13, 2025, 06:30 IST
Read More