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Does #COVID19 change the problem with #Housing (real estate) being the biggest distortion in India?
This is an appreciation self-perpetuation game, fueled partly by black money.
SEE MATH BELOW
cc: @andymukherjee70 @VishalBhargava5 @KD_MHUD @Subhashgarg1960 @CafeEconomics
This is an appreciation self-perpetuation game, fueled partly by black money.
SEE MATH BELOW
cc: @andymukherjee70 @VishalBhargava5 @KD_MHUD @Subhashgarg1960 @CafeEconomics
Income for professionals (not CEOs, not maids) is ~1/4 to 1/3 of the US. Interest rates are 3x, without a full tax shield. So you pay 10x in affordability (EMI). Rental yields are only 2-3%.
And what is the quality of the home, construction, and public amenities w/ your home?
And what is the quality of the home, construction, and public amenities w/ your home?
This means:
a) A 1 crore "cheap" place [yes, that's relative] is like $1.5M in the US - you can get nicer California homes.
b) The only reason this "adds up" is appreciation value (the 6-7% spread to interest rates [now falling].
Housing in India is simply unaffordable.
a) A 1 crore "cheap" place [yes, that's relative] is like $1.5M in the US - you can get nicer California homes.
b) The only reason this "adds up" is appreciation value (the 6-7% spread to interest rates [now falling].
Housing in India is simply unaffordable.
We fail #quality inside & outside the home. This is before missing out on sustainability.
We have #GreenBuiding codes more on paper than in practice, and even those codes don't reflect local conditions, state of the art, etc. (like ISO, reflect inputs). https://qz.com/india/246721/why-plumbing-in-india-starts-leaking-in-a-few-months-while-it-lasts-decades-in-the-west/
We have #GreenBuiding codes more on paper than in practice, and even those codes don't reflect local conditions, state of the art, etc. (like ISO, reflect inputs). https://qz.com/india/246721/why-plumbing-in-india-starts-leaking-in-a-few-months-while-it-lasts-decades-in-the-west/
Ultimately, we have bad regulation and governance. There's also corruption, legalized through zoning (aka "notification").
"Agricultural land" was the official reason. This led to palatial "farmhouses" around Delhi (to circumvent the Land Ceiling Act) https://www.huffingtonpost.in/rahul-tongia/overruled-why-maximum-gov_b_9234308.html
"Agricultural land" was the official reason. This led to palatial "farmhouses" around Delhi (to circumvent the Land Ceiling Act) https://www.huffingtonpost.in/rahul-tongia/overruled-why-maximum-gov_b_9234308.html
The FSI built-up ratio rule means elite housing has private playgrounds, instead of building up to create more public space (like cities globally).
Problem is most people (builders and politicians) think building up = more leftover money on the table. https://www.economist.com/leaders/2020/01/16/home-ownership-is-the-wests-biggest-economic-policy-mistake
Problem is most people (builders and politicians) think building up = more leftover money on the table. https://www.economist.com/leaders/2020/01/16/home-ownership-is-the-wests-biggest-economic-policy-mistake