Well, the reason is sheer economics. In spite of global economic meltdown towards the end of 2008, Indian economy remained comparatively stable while giant economies like the USA and countries in the European Union are still struggling to make a comeback.
The Indian banks are nationalized and have to adhere to the norms set by RBI. The RBI insists on certain cash reserve ratio or CRR, (enforced in 1950,) to be followed so that there is some level of safety and liquidity. The CRR is also a monetary tool wielded by the RBI and the government to curb inflation and help economic growth.
Commercial banks borrow money from the central banking body or RBI when they need cash at a certain rate called the repo rate. When the commercial banks deposit money with the central bank, they are paid interest at the reverse repo rate which is lower than the repo rate.
In the last fiscal year RBI has revised the repo rate thirteen times to control inflation. At present the repo rate has been held fixed but the CRR holdings has been reduced by 0.5% releasing cash into circulation.
To the common man this means loans are available from the banks more easily, with a slightly lower rate of interest of borrowing than before.
So the people who would like to invest in real estate find this a golden opportunity. Land, flats, houses in cities are usually beyond the reach of the common man. But satellite towns and cities like Gurgaon, so close to Delhi, show large potential for growth in real estate. So the present time is very favourable for buyers to invest in real estate-land, or commercial or residential property in Gurgaon.
With the ease in the flow of funds likely to continue for some more period of time, the investors can have a field day, with commercial banks offering low interest rates to attract borrowers.
So if you are on the lookout for positive returns on your money, real estate is the option ! And
Gurgaon has already been showing trends in appreciation in property values in recent times. It is going to hold true for some more time!
RBI interest rates further decline in rates will help property appreciation.
Narinder Juneja is a expert author of property in india. For more information on Real estate in gurgaon
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