The Week: Realty in Reality

December 3, 2013

Nikhil Kamath, Director of Zerodha authors an article in THE WEEK, sharing  his perspective on real estate.




I work as AVP - Sales at Zerodha and I coordinate with our business partners and associates, passionate about everything we do at Zerodha. Love life - traveling, music, gaming and humoring the people around me.

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  1. Akhil says:

    a lot of articles these days talk about real estate as an asset class which some how rose to magical levels and why one should invest so that they don’t miss the bus or how the demand outstrips the supply in the long run or why one should take a loan in order to get a dream home. or lot of T.v programs talking about which area to invest in to take advantage of appreciation

    But as a student of economics i fail to understand why no one addresses the real issue. how can land prices rise so fast without the underlying fundamentals supporting them.

    Why no one talks about the role of banks and RBI in the run up of land prices

    banks?? RBI?? how come

    ans:- “Fractional Reserve banking” modern monetary joke

    magically creating money out of thin air to finance either government or the business

    any bubble has one thing in common i.e “confidence” in future

    if the confidence is lost the money disappears as it has rose. “magically”

    Property prices are alleviated because the world is awash with liquidity not only property be it bonds equities, art, commodities, and what not. This is a global phenomenon. Run a google search on real estate and you will get the answer.

    it is never about demographics

    it is always about confidence

    the way with which the world central banks are keeping the world awash with liquidity it definitely tells something is wrong.

    the world is kept on a life support.

    well they say history repeats lets wait and watch what a loss in confidence seems like

    “I’m a believer in free markets, but I’m not a believer in laissez-faire,”

    quoted by Raguram Rajan

    i say this guys is a Bloody closet interventionist

    If one rejects laissez faire on account of mans fallibility and moral weakness, one must for the same reason also reject every kind of government action.

    What transformed the world of horse-drawn carriages, sailing ships, and windmills step by step into a world of airplanes and electronics was the laissez-faire principle.

    Laissez faire means: Let the common man choose and act; do not force him to yield to a dictator.

    Laissez faire, laissez passer does not mean: let the evils last. On the contrary, it means: do not interfere with the operation of the market because such interference must necessarily restrict output and make people poorer.

    Laissez faire does not mean: let soulless mechanical forces operate. It means: let individuals choose how they want to cooperate in the social division of labor and let them determine what the entrepreneurs should produce.

    The greatness of the nineteenth century consisted in the fact that to some extent the ideas of Classical economics became the dominant philosophy of state and society.

    quoted by
    Ludwig von Mises

    hope the world goes back to laissez faire