On Wed, 2014-04-09 at 09:56 +0530, Udhay Shankar N wrote: > - Opportunity costs: Real estate typically (say over a 10+ year > period) lags behind the stock market in rate of return. Given > inflation rates in India, it probably lags behind inflation as well - > making it a net losing proposition. (This is an aggregate claim - > please don't respond by quoting individual examples) > > Also, something is only an investment if there is a willingness to > convert it into money, which does not typically seem to be the case.
Udhay, "wealth" in India ( I have no statistical figures - I am guesstimating) is often measured by land owned because gifts of land were given by kings to loyal subjects and people deserving of royal gratitude. Land was wealth in an economy that was primarily agrarian. That is how we have Indian economic classes like "landed rich" and "landless poor" Real estate as an investment makes most sense if you don't own any at all. After that it makes sense in different ways. One typical method is to wait for appreciation and sell to use the money for another "investment" such as donation fees for son's medical college. Another reason for acquiring land is to leave behind significant amounts to children in one's will to avoid infighting and ensure that everyone has a piece of land to live on. In none of these instances is a direct assessment being made of the monetary value of land as investment. In that sense "education of one's children" is considered and "investment in the future" but don't you think that is financially absurd to do that? There is no direct monetary rationale for that shiv
