MUMBAI: Real estate industry though hit hard by high interest rates, feels that high rate of inflation might be a blessing in disguise as historically it has always attracted more investment into the sector.
"Historically, if you see, people used to invest either in real estate or gold to hedge inflation. Only in recent times people are investing in shares, but real estate is a long-term investment and so it is the best bait for investment when inflation is higher," Hiranandani Construction's Managing Director Niranjan Hiranandani said.
The higher the inflation, the more the depreciation of rupee and the costlier the properties. Thus when inflation is inching up, people should invest in real estates, the prices of which are certain to go up further, he said.
"When inflation starts to pick up and people should start investing in properties. It will be a big mistake for the investors to wait for the price to cool down," Hiranandani said.
Inflation in India is a worry for the decision makers and the people at the receiving end as it notched up to 11.05 per cent on the back of rising crude prices, currently hovering around $140 per barrel.
This has propelled domestic banks to tighten lending. As a result, a large number of developers have stalled their work on properties half-way and are now scouting for funds even at a higher rate of interests and disposing their stocks at a cheaper rate to have liquidity for finishing the pending jobs.
