How many Mercedes can you sell in the land of Marutis? Not every one understands the dynamics of real estate and why the market is down. So let us understand the scenario in the real estate sector vis-a-vis the auto industry. Why is the real estate sector facing a slowdown in India while the auto sector is doing fine? If people are buying cars and bikes, why are they not buying houses and preferring to stay on rent? In most of the developed countries, people own houses and cars are taken on long-term rent or, as they prefer to say, lease. So why shouldn't the same scenario be in India, especially considering that a house (or any property you buy) is an appreciating asset (well, most of the times!) and vehicles are a highly depreciating asset, with most experts considering the value of a vehicle equivalent to nil after 8 years? The very first thing you learn in economics is demand and supply. When the demand is high and the supply is low, the market goes up and vice versa. There i...
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