Looking at things with a short-term perspective it may seem good to see the real estate prices rise quickly. It can be perceived as consumer confidence and also as growth in personal wealth when compared to peers. Unfortunately, this feeling is short-lived when we actually put this premise to test.
Let’s say you sell this appreciated property, you’re holding cash and you’re out in the market to buy something new. You’ll quickly realize that you are forced to look at something much outside your old neighborhood and also at something smaller than the one you just sold. Which means that the real estate appreciation was more a measure of the decreasing value of the Rupee and not really a true appreciation of the property.
The economy has to run on its own merit. But the ongoing & way overdone economic stimulus is now hurting the economy and the people more than it helps. This is destroying the ecosystem necessary for the real economy to thrive. Govt. interference should only be occasional and when it’s extremely essential. Such long life-support to the economy has now created an artificial economy that will go bust the moment the stimulus stops. Also, this stimulus doesn’t come free.
The government going into massive debt and unwarrantedly pumping all the money into the market is the main reason behind the growing real estate prices.
Such bad economic policies have also resulted in the Rupee value depreciating very badly. Which in-turn will lead to higher petrol/diesel prices thereby causing an even bigger burden on the people and the real economy. It’s a slippery slope.
Rising real estate prices are pricing a huge percentage of the population out of the market. The other alternative being a massive bank loan that’ll keep the people tied down with heavy mortgage payments for a long time.
The video is added below.