Tremendous increase in land prices during last 10 years - Indian Real Estate Forum

Krazy Yuppie · 30-01-12

Land prices throughout India particularly in NCR have increased about ten times during 2001 to 2011.No laws of economics can justifuy this insane increase.Is land shrinking or there is unprecedented demand?Due to increase in land prices,housing has become unaffordable for middle class .
Can any body explain to what extent this can go in near future?

Krazy Yuppie · 04-02-12

Four days have passed but no comments on this serious topic.

This means that forum has been hijacked by the brokers.

AnkurPune · 04-02-12

I don't think this forum has been hijacked by brokers

(I am not one)

There are fundamental reasons for increase in land prices as well as there is a bubble factor as well.

1) Inflation is causing the nominal value of all assets to go up and does contribute the the rise in land prices.

2) Lot of foreign money is coming into India and it is bound to get the prices up.

However only a part of the increase is due to the above factors, rest can be attributed to the real estate bubble formation.

whitemonk · 04-02-12

Could you provide the source of your data?
The nominal GDP of India has increased close to 4 times in last decade. A sizeable portion of GDP comes from cities (less than 15% comes from Agriculture and agri-industries for eg). While city-land is also increasing (e.g., birth of Gurgaon, Noida), probably not at the rate of GDP. This had led to faster rise in land prices in "real terms".

What I wrote above is a directional answer. Is the the 2.5x difference between land price and gdp growth all "real" or is some of it a "bubble". Hard to do this math. But its an interesting problem. This is the interesting thing about markets - both pessimists and optimists get proven wrong one time or the other

MANOJa · 04-02-12

White Monk Bhai ( love your name - having Old Monk - Gold Reserve right now ), thanks for answering to Krazy Yuppie Bhai . He was hell bent on apne pajame ka naara dheela karne ke liya in some other thread & i could see an sudden shift of traffic on IREF from High to low, with many members logging off.

30-01-12	#1
Krazy Yuppie Member Join Date: Jun 2011 Location: India Posts: 483 My Mood: Thanks: 701 Thanked 183 Times in 143 Posts	Tremendous increase in land prices during last 10 years Land prices throughout India particularly in NCR have increased about ten times during 2001 to 2011.No laws of economics can justifuy this insane increase.Is land shrinking or there is unprecedented demand?Due to increase in land prices,housing has become unaffordable for middle class . Can any body explain to what extent this can go in near future?

04-02-12	#2
Krazy Yuppie Member Join Date: Jun 2011 Location: India Posts: 483 My Mood: Thanks: 701 Thanked 183 Times in 143 Posts	Four days have passed but no comments on this serious topic. This means that forum has been hijacked by the brokers. Last edited by IGRM; 04-02-12 at 07:36 PM.

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04-02-12	#3
AnkurPune Member Join Date: Jul 2010 Posts: 302 Thanks: 18 Thanked 31 Times in 21 Posts	I don't think this forum has been hijacked by brokers (I am not one) There are fundamental reasons for increase in land prices as well as there is a bubble factor as well. 1) Inflation is causing the nominal value of all assets to go up and does contribute the the rise in land prices. 2) Lot of foreign money is coming into India and it is bound to get the prices up. However only a part of the increase is due to the above factors, rest can be attributed to the real estate bubble formation.

04-02-12	#4
whitemonk New Member Join Date: Dec 2010 Posts: 9 My Mood: Thanks: 3 Thanked 2 Times in 1 Post	Could you provide the source of your data? The nominal GDP of India has increased close to 4 times in last decade. A sizeable portion of GDP comes from cities (less than 15% comes from Agriculture and agri-industries for eg). While city-land is also increasing (e.g., birth of Gurgaon, Noida), probably not at the rate of GDP. This had led to faster rise in land prices in "real terms". What I wrote above is a directional answer. Is the the 2.5x difference between land price and gdp growth all "real" or is some of it a "bubble". Hard to do this math. But its an interesting problem. This is the interesting thing about markets - both pessimists and optimists get proven wrong one time or the other

04-02-12	#5
MANOJa Moderator Join Date: Jul 2010 Location: Shimla Posts: 15,712 My Mood: Thanks: 581 Thanked 1,171 Times in 885 Posts	White Monk Bhai ( love your name - having Old Monk - Gold Reserve right now ), thanks for answering to Krazy Yuppie Bhai . He was hell bent on apne pajame ka naara dheela karne ke liya in some other thread & i could see an sudden shift of traffic on IREF from High to low, with many members logging off.