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POSTED BY ON September 29, 2010 11:48 pm COMMENTS (3)
When do you think Indian Real-Estate bubble would burst if at all it burst? I have witnessed the US Real Estate bubble brust with my own eye so really scared of investing in Real Estate in India that too valuations are very high compared to the developed countries.
Is the current exuburent real estate value are justified? Thanks.
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i think , indian real estate prices may be high compared to developed world due to in india, land is scare compared to developed world ,and demand could be increasing due to fast increasing population. other point for low leveraging here may be due to large portion of the deal is in black money, where the loan is not available. there may not be bursting of bubble. however on long term whether it is good investment or not, is different from person to person, and place to place. it is my feeling that in india, who earned through real estate are through deals with their own unaccounted money, rather than by leveraging through bank/fi finance
@Rajendran
The scenario that lead to real estate bubble in US is bit complicated one. virtually everyone from Individuals, mortgage broker, investment banks, insurance companies, investors, foreign banks are all linked to the US real estate market crisis. To understand better you can visit this beautiful link : http://www.youtube.com/watch?v=oosq3TPgHH0
coming to india – Here RBI keenly monitors the credit lending of our banks to real estate sector and maintaining a cap over it. Hence you can be pretty much assure that there wont be real estate bubble of US kind.
coming to investment to real estate – historically real estate investment does not delivered spectacular returns when compare to equity markets. considering current condition of sky-rocketing land prices, i would not suggest real estate as good investment.
what do u folks think?
The valuations are really very high here also. But the chances of burst is not here. The reason is simple, in USA the main reason of all crash was loan given by banks to those who had bad credit history on very high interest. And everyone knows, what happened thereafter.
But in India, there is no such rule. All the financial institutions check all your documents, like bank account, source of regular income, ITR, etc. before giving any kind of loan. So, story is all different here.
Hope it will help you.
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