It appears as if Interest rates and Property prices are inversely proportional. But there are some more real reasons for Property Price rise. I think one of the reasons for this rise is "Awareness Levels" of the income generating group.
When I entered Bangalore around 10 years back, my inclination towards buying site is nil. Because around 10 years back only few individuals know that only land price will increase after you buy. But today you ask a 20 to 25 year old IT professional and he already bought land or planning to buy a land.
Today "INFORMATION" invaded the masses. Earlier some economically forward communities used to know about the coming of an "Industry" or "Dam" in certain area and a few friends or communities used to invest in land in that area. Whereas significant percentage of population is not aware of the coming developoment.
But today if a new IT park is proposed in a new area or a Hardware park is planned or a Peripheral Ring Road is planned, the information is reaching the income earning group. Obviously it is leading to more people willing to invest in land. And today the information is reaching universally the educated or un educated. Whereas 10 to 20 years back it used to reach only few people.
Since this "Information Reach" is the root cause of land price rise, I don't think we will see any major decline in price rise.
And other major reason for the rise of land prices in the last decade is due to the rise of population. Earth is fully loaded now and definetely land is going to become a scarcity untill and unless a major war takes away one third or half of Earth's population.
Lanka
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