If you were to go any broker today to buy a property, you will most definitely have some apprehensions against the unbridled nature of a speculative market as it is today. But most conveniently he would like to turn a blind eye to all this and his suggestion would be more like, “Keep your eyes on the road and stop reading these signs.”
But the prices if left out of control can also add to the cost of production and services, making things back to square one. The boom is rooted in speculative investment by ordinary homebuyers, fueled substantially by the worldwide perception that capitalism has triumphed, and that all people must look out for themselves by acquiring property. Convinced that private ownership has become essential to smart living, buyers bid up home prices. This certainly seems to be the market psychology in India, where rapidly rising incomes and newly successful people are widely expected to put pressure on markets for land, real estate, and construction materials.
According to the value investing theory for the stock market, the mood in the market alternates between over-exuberance and depression. Whenever a mood swing in the market (or a company’s temporary misfortunes) depresses the price of a stock far below its intrinsic value, the value investor should buy the stock at such bargain prices, provided he thinks that the company’s fundamentals remain strong.
When assessing the feasibility of and demand for a real estate project, generally one would look related macro and micro factors, such as GDP performance, supply (competition), absorption, market price, construction costs, population, demographics, household income, working population, site location, infrastructures, amenities and so on, and work out the likely demand from bottom up.
However, this is not always possible or even meaningful, especially if the market (economy) in question is an emerging / developing one, as whatever existing market statistics it has (may or) may not be helpful in pointing toward certain market trends and real estate opportunities previously unseen. The same is the case with India where Exceptions always outnumber rules.
So far so good. But it’s the time to keep your eyes on the road and hands on the wheel.
Recent reports suggest that the Indian real estate market is burgeoning and becoming a significant contributor to India’s economic growth. The country is on the radar of many corporations looking at investing or expanding their businesses in Asia and the economic and business outlook is positive.
But the prices if left out of control can also add to the cost of production and services, making things back to square one. The boom is rooted in speculative investment by ordinary homebuyers, fueled substantially by the worldwide perception that capitalism has triumphed, and that all people must look out for themselves by acquiring property. Convinced that private ownership has become essential to smart living, buyers bid up home prices. This certainly seems to be the market psychology in India, where rapidly rising incomes and newly successful people are widely expected to put pressure on markets for land, real estate, and construction materials.
According to the value investing theory for the stock market, the mood in the market alternates between over-exuberance and depression. Whenever a mood swing in the market (or a company’s temporary misfortunes) depresses the price of a stock far below its intrinsic value, the value investor should buy the stock at such bargain prices, provided he thinks that the company’s fundamentals remain strong.
When assessing the feasibility of and demand for a real estate project, generally one would look related macro and micro factors, such as GDP performance, supply (competition), absorption, market price, construction costs, population, demographics, household income, working population, site location, infrastructures, amenities and so on, and work out the likely demand from bottom up.
However, this is not always possible or even meaningful, especially if the market (economy) in question is an emerging / developing one, as whatever existing market statistics it has (may or) may not be helpful in pointing toward certain market trends and real estate opportunities previously unseen. The same is the case with India where Exceptions always outnumber rules.
So far so good. But it’s the time to keep your eyes on the road and hands on the wheel.
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