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Why should one invest in real estate NOW?

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Why should one invest in real estate NOW?

Last updated: November 21 2011
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  • Why should one invest in real estate NOW?

    To my simple mind, investment in real estate in India seems harakiri, stupidity etc. But what do I know!! Can someone elaborate

    1. Why one should invest in an asset that has seen 300 to 500 % appreciation in last 4-6 years?

    2. Why one should invest when the economy is slowing down and all other investments are getting curtailed?

    3. Why one should invest when the cost of money (interest rates) are going up?

    4. Why one should invest when there is deception and cheating in the market? (delayed projects, super built up, sale of parking area for cash etc.)

    5. Why one should invest when incomes are not rising at the same pace! (or are they?)

    6. Why one should invest when real estate markets in most places (outside India) have seen bubble bursts or contractions?

    My simple mind has no answers, perhaps the brokers, builders and investors in this forum can answer. Please do not answer if you think one should NOT invest. I am looking for reasons why one SHOULD invest.
  • #2

    #2

    Re : Why should one invest in real estate NOW?

    Originally posted by AJ2008oo View Post
    To my simple mind, investment in real estate in India seems harakiri, stupidity etc. But what do I know!! Can someone elaborate

    1. Why one should invest in an asset that has seen 300 to 500 % appreciation in last 4-6 years?

    Especially in Suburbs of major Cities even after a 300-500 % Rise, the room for further appreciation is even more with improved connectivity
    and infrastructure as the suburbs get integrated with the Cities.

    2. Why one should invest when the economy is slowing down and all other investments are getting curtailed?

    This is a forced slowdown due to a series of rate hikes.The situation will turn around once RBI end the Rate Hike Cycle.

    3. Why one should invest when the cost of money (interest rates) are going up?

    See 2.

    4. Why one should invest when there is deception and cheating in the market? (delayed projects, super built up, sale of parking area for cash etc.)

    If you look outside of the Big arrogant promoters with political muscle / financial power who deceive more often than not, there are honest promoters who stick to their word.

    5. Why one should invest when incomes are not rising at the same pace! (or are they?)

    Your statement applies more to the Salaried class. Business people still make money and they eternally seem to make more and more money as India gets more affluent. Ofcourse there are babu logs and their mantri bosses who are a class apart in terms of money making skills.

    6. Why one should invest when real estate markets in most places (outside India) have seen bubble bursts or contractions?

    The level of speculation in those markets were unimaginable.Agreed,
    some cities in India have high speculation too. But the same does not apply across the board.Moreover the Growth in those economies are almost non existent and Joblessness is very high.India is a shade better in most of economic/demographic parameters.


    My simple mind has no answers, perhaps the brokers, builders and investors in this forum can answer. Please do not answer if you think one should NOT invest. I am looking for reasons why one SHOULD invest.
    So overall, I have a positive feeling about the direction of Real estate as an asset class in India in the Medium term (3-5 Years) and beyond though in the short term one cannot be very certain.

    All the Best.

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    • #3

      #3

      Re : Why should one invest in real estate NOW?

      Good response. Is there no 'data based' assessment possible? e.g. about the upside or the downside?

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