I have been following information about realty sector growth in India and would like to put my thoughts here based on my experience as well as observation.
I am strong believer of the fact that for a long term investor, investment in land in India will never be a problem. This is driven by following:
(1) Growing number of people in India, resulting in more demand
(2) Increase in buying capacity of middle class and in general
(3) More industrialization and growth of the country, thereby causing shortage of land available for residential and industrial use...
And more...
Check out this article on Economic Times which is relevant on the same lines, as stated above.
The investment in a constructed house or flat in India might put you in risk in times of recession, but investment in land would not (in long term, say 3-5 years or more). If one has reliable contacts to invest in land, I would suggest to invest in this evergreen and best investment option.
In my view, it is better than investment in stocks, or any other investment, in terms of best returns, safety (if one has reliable contacts). Of course, one needs to diversify the investment portfolio, to reduce risks.
I will be glad to see your comments on this article and provide more inputs if you need.
2 comments:
Raj
It should be Realty not Reality.
There are lot of issues in land purchase.
1.contacts as u rightly said.
2.it's illquid investment, u can't dispose in a day.
3.High Registration fees and stamp duties.
4.rampant corruption in land registration deptt.
5.umpteen number of crooks/dalals (u must have khosla ka ghosla movie)
if we remove all these impediments, then land as a asset class can truly become a accessible to lot of middle class investors
Thanks for your comments, Anshuman.
Sorry for the typo, I ended up writing my post in hurry.
I agree that one can not dispose in a day, but I believe, with positive aspects of the investment in land, one needs to be little flexible and plan for it accordingly in advance. As we know, it is so because of nature of this investment.
In my view, high registration and stamp duties can be compensated by good amount of returns one gets in this investment. Also, a long term player will have little more advantage in this aspect too, as registration does not need to be done frequently in that case.
Regarding corruption and dalals, if one has good and reliable contacts, then it may be little easier (though may not be very easy). Also, the conversion of records in soft form is in progress, which might result in improvement to some extent. However, I agree that there is corruption in land registration department, and it may take time before things get better.
To summarize, though it may not be possible to have a very easy system immediately, but with right channels it is still be a good bet to invest in land (especially in right land opportunity, because growth prospects in different areas differ).
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