A recent post on Reddit has sparked a heated debate about the Indian real estate market, describing it as a “lucrative investment opportunity” that primarily serves as a mechanism for transferring wealth. The discussion highlights how this system is largely fueled by the aspirations of the middle class.
According to the Redditor, the process begins with policymakers, bureaucrats, and entrepreneurs acquiring real estate at minimal costs. Over time, the value of these properties is artificially inflated through speculative activities and government policies. Ultimately, these assets are sold to the upper middle class, who finance their purchases with substantial loans spanning 20 to 30 years.
“The wealth transfers from the working class to the elite, while banks collect interest for decades,” the user summarized, pointing out the long-term financial implications for buyers.
The cycle generates significant profits for early investors, while new buyers are burdened with overwhelming debt. The post adds that many middle-class individuals believe they are investing in a valuable asset, but in reality, they are participating in a system where wealthier individuals reap the benefits.
“The middle class takes on 30-year loans, believing they are acquiring a valuable asset, but ends up paying 2-3 times the original cost in interest,” the post explains. It warns that if this cycle slows down, future generations may inherit a problematic financial burden.
The Redditor also highlights the role of inflated salaries in the Indian IT sector in sustaining this system. “The real estate market relies on these inflated IT salaries—who else can afford to take out loans of 3-5 crores for a 2BHK?” the user questioned.
IT salaries act as a pillar for the market, enabling individuals to secure hefty loans and keep the cycle moving. However, the user warns that the sustainability of this system is precariously tied to the continued growth of IT salaries, which have already reached substantial levels. Indian IT professionals earn salaries comparable to or exceeding those of their American counterparts, despite operating in a vastly different market. If these salaries stagnate or decline, the demand for real estate could plummet, risking the collapse of the system.
The illusion of real estate as a safe investment could shatter, exposing the significant wealth transfer from the working class to the elite. “Real estate in India isn’t just an investment—it’s a wealth transfer system where the rich profit, the middle class finances it, and IT salaries are the only reason this illusion hasn’t fallen apart yet,” the user concluded.
However, not all Redditors agree with this perspective. One user argued, “Prices are inflated because currency is devalued by money printing. Real estate serves as a better store of value than cash itself.”
Another Redditor countered, “The concept of wealth is misunderstood when every middle-class person decides to invest in real estate. Most of us invest in real estate for residential purposes, not to generate wealth. Wealth is something you create from the asset, not the asset itself.”
