Biggest Challenge To Real Estate Comes From China!


Every Tom, Dick and Harry had only one opinion about real estate 2 years back. It has nowhere to go except up. I spoke to many people and gave them all my 2 cents but they all dismissed me at that time and started giving me lessons in investing. I am no guru i say what i see and what i feel.

Real estate is not God it is not something which can never go down. It is an asset class and like any other asset class has risks involved in it.

The biggest risk and challenge in real estate in India comes from China. As everyone knows that America is under huge debt from China viz about $11 trillion and everyone including China knows that American Government will never repay the debt.

The Chinese have a huge bundle of US Dollars in there reserves. So much so that even American Government does not have that many.

The time is not far away when Chinese people will start selling the USD aggressively and will make the US currency go tumbling down. Once that happens the INR will be so down as well that no one in the country will have a job or money to even pay for food, let alone invest black money in real estate.

This will happen pretty soon and will take everyone  by surprise. When this does happen the first market to crash will be the Equity market. The next one will be real estate.

The equity market will survive just because of liquidity in it, but real estate and people involved in real estate will most likely be most burnt out because of sheer lack of liquidity in the sector.

No liquidity and still people say real estate has nowhere to go but up.


Leave a Reply