Today I am sharing a quick 5 minute video clip and an interesting article with you. Ajit Dayal, the man behind Quantum Mutual Fund talks about how Indian real estate, politics and banking is intimately connected and works against the average home-buyer in India.
Source: Deepak Gupta
In a nutshell, he analyzes the situation during the period between 2008-09 when the global financial crisis hit us. He describes how public sector unit bank (PSU bank) lending to real estate companies increased by a big amount in a bad year when private banks were going slow. His contention is that this enabled many real estate players to maintain high real estate prices in the face of a practical strike in real estate purchases by buyers. He rightly points out that the PSU banks are controlled finally by politicians. And we all know that the Indian real estate sector and politicians have a very close relationship.
I highly recommend reading his article on the Indian real estate sector that he wrote in 2009.