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Earlier, having a house was a dream that took years to fulfil and needed a lifetime’s savings and loans from relatives and friends. Things have changed a lot with the advent of home loans. But not only are people buying houses sooner in their lives, home loans are also fuelling the appetite for hoarding real estate. The concept of real estate has transformed from just being a place to live to an asset class of choice. The average Indian’s love for real estate is well known, and why not? In some pockets, real estate and land have delivered above average returns relative to most asset classes. However, due to lack of regulatory control, the sector has also become a favourite investment avenue for many with undisclosed income sources. Along with gold, the real estate sector has played an ancillary role as a vault of illicit wealth in the country. But the emerging trend speaks a different story—real estate may be losing its attractiveness and giving way to financial assets. This change in trend is being driven primarily by: • Positive real interest rates after a long period of financial repression • The central government coming down heavily on black money. The latest in this is the proposed Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, also known as the black money Act, which recommends classifying offence as non-compoundable, and up to 10 years imprisonment, thereby placing ownership of foreign illicit assets at par with criminal offence • Elevated ownership of properties in the past few years
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