Real Estate crash in India Estate prices have kept moving upwards relentlessly even as other asset classes have languished. Corporate mis-governance and corruption has driven investors away from equity, while bond and fixed income investments have been less attractive because of high consumer inflation. This has made gold and real estate the preferred choice of […]

International Business After globalization becoming the buzzword in today’s world, international business has given a new shape and has also created a new dimension in the world of business as in how the business is carried out. In a layman’s word, International Business is related to the business which is carried out internationally. Formally it is […]

India’s Real Estate Companies have seen a very tough 3-4 years with interest rates climbing, investors running away from shoddy accounting and the global macro scene being quite bad. One needs only to look at the stock price chart to see times have been very bad. Besides some of these companies have come under court scanner for their practises with Unitech CEO spending some months in jail for a telecom scam. However property prices have not come down as India’s real estate bubble seems immune from crises in the West and in India . Prices have more or less remained stable while other assets have seen a major carnage at one point or the other.

Investing Money in India right now is a very confusing matter given the large number of choices and the lack of attractiveness of different assets due to different reasons.There are hundreds of voices seemingly intelligent but who are selling their own books.If you turn on the finance new channels they will keep saying buy stocks for the long term as if a normal investor can make money by buying stocks for the short term.Gold proponents will say that it has been a great investment over the last several years and with the US,European systemic shocks it will remain so.However the rapid uptrend in gold prices has made it a somewhat risky investment.Investing in Gold is also not easy given the wide array of choices like Gold ETFs,physical or futures.So lets see each asset class with its pros and cons

Real Estate Prices in India have gone through the roof crossing the highs they made during the 2008 run-up.Note real estate in a lot of places globally are in a bubble right now – China,Australia,Canada .However the India Real Estate Bubble is seldom talked about as it has not reached the levels reached for example in China.However the property prices are becoming increasingly irrational.The causes of the Real Estate Prices increases in India are mostly due to the fact that Market Forces are not allowed to operate freely.The regulations,corruption,lack of transperncy,vested interests,cultural factors all have a role to play.Here are some of the reason that I think Real Estate Prices are totally irrational in India.Readers of this Blog are urged to add their views as this is a complex discussion and many people will say that Real Estate in India in not a Bubble but a result of High Population Density,Demand,India’s Economic Growth .

India’s new Corruption Scandal involving a Housing Loan Scam involving Bribes paid to India’s top public bank officials has ensnared top notch financial institutions in the West as well.The whos-who of Wall Street got dazed by spectacular growth and profits of a 3 year old financial outfit in India which had been built on a foundation of lies and bribers.This Corruption Scam was started by a Financial Outfit called Money Matter Financial Services which started as a 2 person outfit.However through arranging of debt to big corporate houses by paying bribes to top officials of India’s large government owned institutions such as Bank of Indian,PNB and others,the outfit saw its share price increase by 7 times.