The Real Estate craze
The Real Estate craze
The Real Estate market in India is currently experiencing an unprecedented boom. Rates in newly developed and hip places (Gurgaon, Navi Mumbai, Bangalore.....) have increased by leaps and bounds. And also in not so hip places where the increase is not so much but still quite high by any reason. I am often surprised whenever I ask anyone casually about the current real estate price in Gurgaon (that’s the only place I am able to remain updated about) because each time the increase in like mind-boggling (and I am not exaggerating). There are many reasons given for this continuous rise in rates. But............
I am currently going through a book called A Random Walk down Wall Street . The book is quite interesting as the author (a real big shot in international finance scene) discusses his point of view about stock markets..
Anyway one thing which I was surprised to see there was the resemblance (although not to that extent) of this rise with the infamous Florida Real Estate Craze.
The points used to justify the craze that time were mostly centered on the super rate at which US was growing, it being the land of opportunity and the next biggest economy. And one big support was the easy interest rate regime which they were following at that time. There were statements flowing that this market don't has downside risk.....what happened ultimately was one of the biggest crash in WORLD (ya world) history.
Although the probability of such a thing happening in India is quite remote due to the sane presence of RBI (one of the few institutions working)....but the sagely advices of our honorable Finance minister about having low bank rates do give me jitters sometimes.
Mukul Garg
XLRI (Business Management 2005-07)
The Real Estate market in India is currently experiencing an unprecedented boom. Rates in newly developed and hip places (Gurgaon, Navi Mumbai, Bangalore.....) have increased by leaps and bounds. And also in not so hip places where the increase is not so much but still quite high by any reason. I am often surprised whenever I ask anyone casually about the current real estate price in Gurgaon (that’s the only place I am able to remain updated about) because each time the increase in like mind-boggling (and I am not exaggerating). There are many reasons given for this continuous rise in rates. But............
I am currently going through a book called A Random Walk down Wall Street . The book is quite interesting as the author (a real big shot in international finance scene) discusses his point of view about stock markets..
Anyway one thing which I was surprised to see there was the resemblance (although not to that extent) of this rise with the infamous Florida Real Estate Craze.
The points used to justify the craze that time were mostly centered on the super rate at which US was growing, it being the land of opportunity and the next biggest economy. And one big support was the easy interest rate regime which they were following at that time. There were statements flowing that this market don't has downside risk.....what happened ultimately was one of the biggest crash in WORLD (ya world) history.
Although the probability of such a thing happening in India is quite remote due to the sane presence of RBI (one of the few institutions working)....but the sagely advices of our honorable Finance minister about having low bank rates do give me jitters sometimes.
Mukul Garg
XLRI (Business Management 2005-07)
posted by FINAX at
5:01 PM
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