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>>There was a land price bubble because of black money. Now the bubble is slowly bursting. High value transactions were already tracked AND you can't register
by kamaal 7y ago
>>There was a land price bubble because of black money. Now the bubble is slowly bursting.
High value transactions were already tracked AND you can't register a property anywhere in a city without a PAN card. So enough with this depicting investors as cheats.
There is no bubble because India is in the beginning of urbanization phases, and land rates are obviously high because the demand is way beyond the supply. So the prices being high is basically Econ 101.
Instead of framing arguments this way, try understanding how some people are able to anticipate and buy lands years in advance, while some people can't even maintain discipline to invests in SIPs.
- gautamsomani 7y agoJust to make it clear, not all part of the deal used to happen via formal money exchanged. Some part of deal was transferred via bank/check and some part via cash. This was done to avoid tax on the whole deal amount. And I believe people will still try to do that.
- geodel 7y ago> High value transactions were already tracked AND you can't register a property anywhere in a city without a PAN card. I don't how you never experienced or know that this PAN card requirement is not much. A lot of land/home transaction involves large amount of unaccounted cash and this does not reflect on registered property price. Also if land price is 'obviously high' why rental yields are lowest in India compared to price of property. Who would really buy real estate if bank fixed deposits give better returns than rental income?
- kamaal 7y ago>>I don't how you never experienced or know that this PAN card requirement is not much. You literally can't register a property in Bangalore without a PAN card. So please... AND the registrations are online. Everything is tracked. And in fact people themselves prefer its tracked because it prevents encroachment, double registrations etc. >>A lot of land/home transaction involves large amount of unaccounted cash and this does not reflect on registered property price. This was there long back. People keep repeating this, without any basis. The government can evaluate every single property and its evaluation traded as of at least 15 years now. >>Also if land price is 'obviously high' why rental yields are lowest in India compared to price of property. Because of several things. Firstly Land prices are high because individual people want them. Second when home units are built they are built several units over a single piece of land. Thirdly rental yields are also dependent on quality of construction, access to infrastructure, locality etc. >>Who would really buy real estate if bank fixed deposits give better returns than rental income? Simple reason. If you put money in fixed deposits inflation will eat the principle and you will eat the returns. Liquid money is easy to spend so it goes fast. Real estate is hard to dispose, so it stays and can be transferred over to the next generations. Plus land rates appreciate, and you get rental yield and you can use the deposit money to earn interest. Beyond this you get the advantage of owning a piece of real estate in prime locations as time passes. Stock investments require a lot of baby sitting and economic problems like these its hard for people to make decisions. Money once gone cannot be recovered easily. In case of real estate lands don't rot or vanish. Looking at it from multiple vantage points, Land ownership is by far the best investment you will make in a country like India.
- rohan_shah 7y agoI just explained why the demand is falling...