| SamLora00 2008-06-18, 12:14 am |
| The Kerala Real Estate and the whole real estate sector boom in the country may not be all that great of late, but it still continues to be the preferred savings tool for most Indian households. More and more people in the country are opting for investing in real estate rather than saving in bank deposits, postal savings or buying gold. Analysts feel this trend is a clear indication that people willing to take risks if the returns are higher, especially in a short span of time. The household sector's savings in real estate increased by 16.12 per cent to Rs 5,17,837 crore in 2006-07 compared to Rs 4,45,915 crore in 2005-06. The savings in financial assets have gone up by 11.20 per cent to Rs 4,67,985 crore in 2006-07 when compared to Rs 4,20,841 crore in 2005-06, according to a data released by Reserve Bank of India (RBI).
Bankers feel this is a healthy phenomenon as it reduces larger dependence on foreign funds for investments into real estate sector. The RBI's March 2008 bulletin shows that household savings constituted 23.8 per cent of the gross domestic product (GDP) between 2003-04 and 2006-07, as against 20.8 per cent from 1997-98 to 2002-03. In contrast, the share of physical assets has gone up and accounted for 12.7 per cent of the GDP between 2003-04 and 2006-07, when compared to the 10.5 per cent from 1997-98 to 2002-03.
Further, the reports of government exempting the tax on the income generated by mutual funds, which float schemes to invest mainly in realty stocks, will encourage more households to invest in real estate. Enthused with RBI data, the SBI Mutual Fund had recently filed the offer document with the Securities and Exchange Board of India (SEBI) for launching a dedicated scheme for the real estate. The open-ended scheme would be available in Retail and Institutional Plan with growth and dividend options. |