The real estate market in Kashmir has seen significant growth over the past few decades, with the average selling price of land in areas such as Hyderpora, Lalbazar, and Bemina increasing from Rs 1.50 lac per kanal in 1991 to Rs 2.10 cr to 2.50 cr per kanal in 2023.
This represents a profit of approximately Rs 2 cr over a 30-year period, with an annualized growth rate of 16.70% – 17.34% over the past 32 years.
While this growth may appear to be lucrative, it is important to consider the practicality of such returns over the long term.
The projected exponential growth over the next 32 years seems to be too high, considering the compounding nature of the growth.
Compounded annual growth of 17.34% annually may seem high, but it takes time and a steady growth strategy to achieve such returns.
The magic of compounding is based on a certain growth rate, which is realized on a new base every year. It is important to focus on double-digit returns per annum, such as 12-15-20%, but expecting land to appreciate 160-165 times in the next 32 years as it has over the past 32 years is not logically possible.
Finding an asset that can provide a consistent return of 12-18% annually over a long period may not be achievable with traditional real estate investments.
In such cases, it is important to exercise caution and seek trusted advisory before making any investment decisions.
Consulting a trusted financial professional and considering options such as gold, silver, real estate, shares, mutual funds, and asset allocation funds can provide a more realistic approach to achieving steady returns over the long term.
In conclusion, the real estate market in Kashmir has experienced significant growth over the years, but expecting the same level of growth in the future may not be practical.
It is important to consider the magic of compounding and to focus on finding assets that can provide realistic, consistent returns over a long period.
Consulting with a trusted financial professional and considering alternative investment options may be the best approach in planning for future financial growth.
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