Why Land

Why Invest In Land?

About one in every sixth person on earth lives in India and the growth rate of the population is still rapid. The present fertility rate is just over three children per woman. Although considerably lower than in the 1960s or 70s when women gave birth to an average of five to six children, it is still far higher than in China (1.7 children per woman) or Europe (1.4 children per woman). Since the lower birth rate is primarily a reflection of better living conditions in India, the rate of population growth has moderated to just 1.5% P. A. Since 1970. The improved conditions have also caused life expectancy to increase by 15 years to around 65 years at present. In addition, during this period infant mortality has been halved. The high birth rates and fall in infant mortality over the past few decades imply that India's population is very young. One in every three Indians is under the age of 15 and only one in three is older than 35. This compares it favorably against China, where nearly 50% of the population is older than 35 and roughly 60% in Europe. The three demographic trends, i.e. high but falling birth rate, increasing life expectancy and declining infant mortality are expected to persist in the coming years. Only during the third decade of this century will the population growth rate drop below 1%, consequently by 2030. India looks set to be the most populous country on earth. By 2050, roughly 1.6 billion people will live on the Indian subcontinent, 200 million more than in China. The already impressive number of 700 million people of employable age in India is expected to grow by another 250 million in the next 20 years. Additionally, the valuable economic reform policies, implemented since the early 1990s have created the proper foundation for translating population growth into powerful economic growth.

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Cities will continue to grow

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The United Nations Population Division (UNDP) expects the degree of urbanization to grow over 40% by 2030, implying that urban population will grow by 2.5% per annum in the next 25 years. Hence, while the rural population increases only marginally. Urban population will double by 2030 around 600 million people. There are two clear outcomes following from this. 1) India's cities must gear up to a dramatic increase in size. Their infrastructure (schools, roads, airports, seaports etc.) and housing capacities will need to expand massively. 2) The accelerated rate in urbanization throws into particularly sharp focus the possibility that established centers (i.e. Tier I cities) are already straining the limits of their capacities, leading to above - average expansion in the second - tier cities.

Massive future demand

India possesses the elements of very strong demand growth on the housing market in the coming decades. In a very conservative (and unlikely) scenario in which the average household size remains constant at the present - day level, the backlog of demand cannot be unwound and no shifts in quality take place. Each year some 4.7 million housing units would have to be completed up to 2030. This figure is based on additional demand of roughly 2.7 million housing units and annual replacement demand of roughly 2 million dwellings.

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Price trends in major cities

The housing markets have picked up considerably in recent years. Powerful demand stimuli have caused shortages in almost all cities, pushing up residential property prices. On the supply side too steep rises in energy prices and more importantly, accelerating land prices are fuelling the cost of property. In the ten most important cities, residential property prices jumped by around 25% in 2005. In popular districts, the growth rate over the past 24 months has climbed more sharply still. In some parts of Ghaziabad (such as Indlrapurem or Vaishali) in the north - east of Delhi. For example, House prices have doubled since 2003.
Above - Average economic growth in India :- Strong population growth a large pool of It workers, greater integration with the world economy and increasing domestic and foreign investment are expected to Own India's real GDP by 6% P.A. over the next 10 to 15 years. Services outsourcing revving up office demand :- India is the prime destination for IT services outsourcing. In the coming five years of least 55 million m2 of extra office space must be completed in the premium office segment alone. 600 new shopping centers by 2010 :- India's burgeoning middle class drive up nominal retail sales through 2010 by 100 P. A. At the same time organized retail is becoming more important. At present organized retail accounts for a mere 3% of the total by 2010 the. Share will already has reached 10%. By 2030 India will need up 10 million new housing units per year :- Rapid population growth, rising incomes decreasing household sizes and housing shortage of currently 20 million units will car for extensive residential construction. The financing of owner - occupied housing in particular holds out enormous market potential.

By considering the above Deutsche Bank Research on Indian real estate market

You may be one of the millions of people considering the idea of investing in land and now you want to make sure that you’re making the right decision. Here are some of the reasons why you should make the jump into land investment.

Fixed Value

Why should you invest in land and not in the Stock Market? One form of leverage you get when investing in land is the ‘fixed value’ that comes with this kind of asset. While the values of shares can start crashing in the stock market and the value of your stock may take a dive, you have your land retained at its fixed (if not appreciating) value. Severe crashes in land and property value are quite rare. While there may be some fluctuations depending on the economy and other factors land over the long term is a stable investment in comparison to other investment types.

A Tangible Investment

While banks are experiencing credit problems and paper value is at serious risk, you have your physical investment intact. If anything, it’s always great to have an asset that you can actually see, visit and walk on. The security you get from a physical investment is simply incomparable.

Greater Long - Term Returns

With the heavy investment in land currently rising from the unstable financial markets, you can expect a shortage in this valuable asset in the future. Hence, you can anticipate the value of land properties to undergo rapid appreciation. As the banking sector weakens, investing in property becomes a wiser option.

Low Risk

Historically, the value of land has always gone through an upward trend. This is mainly due to the fact that there is a finite amount of land. With the growing world population putting this piece of asset in increasing demand, the chances of losing your money with your investment are slim.


One advantage with investing in land is that you get to negotiate it's price. With the right negotiating skills, you can bargain with the buying price. This is especially true if you are dealing with a seller who is highly motivated in selling the piece of land or who needs cash right away

High Return on Investment

If you have the right bargaining skills, you can purchase pieces of land at a low price and sell them later, at a much higher price. You may also develop the land and increase your asset’s value as much as a hundred fold. You have heard about self - made billionaires who made it big because of real estate. This is one of the ways they make those billions.

Easy - to - Understand Investment

you may already have heard about accounting scandals involving the Stock Market and other such investments. You should not encounter this kind of complication with land investing. You can usually get a good picture of why property prices change and at what rate.


It goes without saying that there’s an invaluable sense of pride that comes with the idea of ‘ownership’, and this is the peace of mind you get from investing in land.

Practical Use

you can use your piece of land in a number of practical ways. You can develop the land, harvest the resources, rent it, use it as a campground, subdivide it, build a home or business, there are endless possibilities. There is so much to gain and practically nothing to lose when investing in land. When all else fails, or when other modes of investment go shaky, land investment offers solid investment ground.