Business Standard

Resist real estate mania: Lessons from the Chinese property meltdown

The stance of financial policy must not be to prevent lending against the field of real estate. It must be to support the financing that induces ample supply, which will keep real estate prices down

Many people are fascinated by investing in real estate. The typical middle-class dream is to buy three houses: One to live in, one for a child, and one as an investment. Land enthusiasts say “the thing about investing in land is that they aren’t maki
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Illustration: Ajay Mohanty

Ajay Shah

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Many people are fascinated by investing in real estate. The typical middle-class dream is to buy three houses: One to live in, one for a child, and one as an investment. Land enthusiasts say “the thing about investing in land is that they aren’t making any”.

The case for land investment, however, is a bit dubious. There aren’t enough people in India to use the land area. If we generously assume each individual uses 100 square metres totally (across residential and commercial), the land required for the full population of 1.4 billion people is 4.2 per cent of
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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