Some Real Estate Facts To Mull Over
August 21, 2012 11 Comments
(1)Long term returns from residential real estate
Robert Shiller, by tracking the US home prices data from 1890 concluded that in the longer run, property prices grew at an annualised return of around 3%, just keeping pace with inflation.Housing price rises could not outstrip inflation in the long term because, except for land restricted sites, house prices would tend toward building costs plus normal economic profit.
I have no such data for India.But here is what I can attest to:an ancestral house acquired 120 years ago for 6000 Rupees is now valued at 1.2 crores-an annualized return of about 6%.I think this is close to the long term inflation rate in India.
(2)Is home ownership all that it is touted to be?
In a poorer country like Bangladesh, 90% of the houses are owner occupied. Whereas in a richer country like Switzerland, only 33% of the houses are owner occupied.
Europeans are more comfortable with renting compared to Anglo Saxons and we Indians need to decide whose model we choose to follow.Read what Niall Ferguson has to say about property ownership. Read more of this post
Here is a video “Money’s Prophets” based on Prof.Niall Fergusson’s work to balance out all the sinister acts attributed to the Rothschilds in ‘The Money Masters’.Do watch it.It will show an ambitious family rise from relative obscurity to the pinnacle of finance.It will show how they deliberately cultivated their social superiors till they could buy they way into the aristocracy.They might have been upstarts early on but soon they became the very establishment they worked so hard to enter.Undoubtedly they enjoyed the privileges that came from wealth and the proximity to power but it’s hard to see them as evil incarnate.Whatever motives others might choose to impute to them ,they probably saw their own actions as purely business.In fact if we consider the fact that they chose to diversify internationally as a protection against losses due to Anti-Semitic persecution it’s hard not to feel sympathy for them.Do watch this documentary and draw your own conclusions. 
The Ascent of Money by Niall Ferguson is a fantastic book.I was drawn to read it after watching the TV series based on the book and I have no regrets.It’s time and money well spent.
wealthymatters 
The Money Masters
July 27, 2011 2 Comments
I had trouble sleeping last night and so watched ‘The Money Masters’ on the internet.I found this documentary pretty biased.But that’s not to say that the narrator didn’t make some good points.
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