considering the high gold prices, is it wise to sell gold to buy land.
because i cannot tell what the value of my gold will be after 15 years.
Also read that current high gold price is not because of demand, but mostly because of Dollar$ to Rupee rate. So later when economy improves, then gold value will come down.

Can i use this opportunity to sell gold and buy land.
Read more
Reply
11 Replies
Sort by :Filter by :
  • Originally Posted by nomadic
    considering the high gold prices, is it wise to sell gold to buy land.
    because i cannot tell what the value of my gold will be after 15 years.
    Also read that current high gold price is not because of demand, but mostly because of Dollar$ to Rupee rate. So later when economy improves, then gold value will come down.

    Can i use this opportunity to sell gold and buy land.


    ====================

    I can give you a solid advice if you want. That wont fail in 10000 years.
    CommentQuote
  • Selling gold is not a wise plan in this scenario
    CommentQuote
  • This is completely wrong maths ....Real estate prices can go up down ..Even developed countries like US ..the real estate assets depreciated by 75 % in 2008 ( due to housing crisis) and the market is yet to recover after gone through 4 years. Still there are so many hoardings satting "Houses for Sale " with no buyers

    Its not a stable market as you think - The fact is . , the downturn and upwards does not happen in months FOr Eg ..teh airline industry trend is -every seven years it does down and bounces back .Real estate market is very similar goes up after certain years and takes time to recover. ...People tend to move away from city and buy on outskirts for less prices .Evidently the market price for lands inside urban limit gets saturation and cannot go up ..and even if it goes up ..there will be less or no buyers ...

    Now back to the point -see the consistent grwoth of Gold market ... year upon year its increased heavily ..there is no chances of its going back ..Slight slippage will happen every day or month ..thats market adjustment


    Final verdict - Gold safe investment and value goes year and year with consistent growth. whereas the real estate market spiked growth in short term ...but market may not be stable for ever .
    CommentQuote
  • I am an RE bull. Do not think there will be any respite to rising RE prices.

    But even I am thinking for getting in Gold. Gold (Intl Market) is going through correction. $1500 should hold and might rally to 2000, could be good point to get in.
    CommentQuote
  • Never do that... Do not empty the gold basket and put it in land. If you have in excess which you can spare you should else you cannot. If you are planning on some quick money would not suggest that approach -> You need to have the "Sukra desa at Ucham" :) .
    Good Luck
    CommentQuote
  • You can, if lets say you have 20 lacs in hand and 5 lacs in gold and you come across a plot in very good location coming at very attractive price and the cost is 25lacs non-negotiable.
    CommentQuote
  • Now gold is at high range. RE is in moderate range. No big demand for RE and the market is dull. You can nogo better for RE now.

    A portion of gold can be sold to buy RE in good location
    CommentQuote
  • thanks, most seem to advice not to sell :)
    still, does the below points seem unreasonable ?? any answer to this?

    1) Only in Rupee value gold is increasing fast, not in dollar value. So later when Rupee strengthens, gold in Rs will come down.
    2) Growth of gold in $dollar is normal only, not as high as in Rs.
    3) In India, physical gold demand per person will come down in next generation. ie. Those who already use less may continue the same, but those who buy more may reduce the consumption.
    4) Idle gold is of no use, you get no returns. with land you can construct building and let it for rent/live/many uses.

    now consider this situation, you have no excess money.
    you have only gold and you wish to own land.
    you have only two options, to sell gold or take loan and pay in EMI.
    which would you choose and why? can some body give your thoughts on this.
    CommentQuote
  • Primary Question
    ----------------
    Whether the land is bought for constructing your own house (or) for investment.

    Scenario I
    ----------
    If you do not have a house, and are planning to buy this parcel of land to build your house, i would suggest you sell the gold and buy the land. Because you will be paying interest otherwise for the land, and gold is not going to be productive sitting idle at home.

    Scenario II
    -----------
    You are hoping land price will go up, and in that hope you want to sell the gold and buy the land. I would suggest not to sell the gold, because you are speculating, and it can work both way. No-one can time the market / future.
    It is easy to safeguard gold, but very difficult to and cumbersome to maintain a parcel of land away from your reach.

    Cheers
    Arun
    CommentQuote
  • There cannot be a generalized view on RE, in comparison with gold. You have to be specific about the city/area/locality and other specifics of the property. RE price shoot ups are more often determined by local factors than global economy. Historically, gold has never gone down, so has RE (except marginally, once in a decade or so), and therein ends the similarity. Perhaps RE is a little more volatile than gold. World economy doesn't look so good, so Gold appears to be a safe bet for now, without comparison with any other asset class.

    Now to answer your question - depends on the property you are planning. But if you think you are getting a good deal with the land, I would say YES! Simply owing to the basic advantage gold offers over RE - you can accumulate gold in small amounts, say even one or two grams with what's left in your wallet at the end of the month, over a period. But not RE.
    CommentQuote
  • Big Difference - Leverage and Liquidity

    Leverage is an important difference between RE and gold.

    You do not borrow money and buy gold.
    But you can do it on property.

    Most returns on RE are because of leverage especially more recently.
    Both should give good returns in this kind of Inflationary environment.

    Liquidity:

    Gold easy to sell, you can buy and sell day to day. Good as cash.

    Property holding period is more, not easy to sell sometimes.
    CommentQuote