Zerodha's Kamath proposes linking property prices to air, water quality

Nithin Kamath, the co-founder and CEO of Zerodha, has proposed that property prices should be linked to the quality of water and air as a way to combat soaring air pollution.  

 

Kamath suggests that property prices should be discounted based on the quality of air and water as this would encourage homeowners to improve their surroundings. 

 

"Maybe a property price discount for the quality of air and water is the solution," Kamath wrote on X, arguing that aligning economic incentives with environmental quality could drive collective action.

 

•  He also said that air and water pollution can have a serious economic impact, including: 
• Reduced tax revenues 
• Falling land values 
• Degradation of civic infrastructure 

 

"If I went from owning a property in JP Nagar and caring for it to caring for my layout in JP Nagar and then the whole of JP Nagar, it could have a better outcome," he wrote.

 

His argument comes a time when elhi, with an Air Quality Index (AQI) of 412, remains suffocated under a hazardous smog. Neighboring cities like Noida and Ghaziabad  are hovering in the 'very poor' category, while Anand Vihar recorded an AQI of 473.

 

Kamath argues linking property prices to environmental health could drive better urban planning and foster community efforts. “If economics accounted for this, maybe we would all figure this out,” he said, emphasising the need for a systemic approach rather than isolated solutions.

 

Kamath points out that while Delhi dominates headlines, other metros like Mumbai, Chennai, Kolkata, and Bengaluru also suffer from worsening air quality. The problem is systemic, not regional, and demands collective solutions.

 

Kamath's proposal has sparked discussion on how value and responsibility are assigned in cities. Some say that property prices are already determined by air and water quality. Others note that people are more likely to react to things that affect them financially, rather than concerns that affect their physical and mental health. 

 

Kamath has  also expressed concerns about the elevated property prices in India, particularly in major cities like Mumbai and Delhi. He has pointed out that these high prices may not always align with the fundamentals of the economy, which could make them unsustainable in the long term.

 

Moreover, Kamath has been a proponent of investing in the stock market rather than real estate, especially when compared to the returns from real estate investments. He has argued that real estate, while a safe and tangible asset, might not offer the kind of returns that equities can, particularly over the long term. His focus has typically been on advocating for equity-based investing and wealth-building strategies that don't involve tying up significant capital in properties.

 

 Kamath has pointed out that one of the challenges with investing in real estate is its illiquidity compared to stocks. While stocks can be bought and sold with ease, real estate investments are typically long-term and involve higher transaction costs.