During the late 70s and the early 80s, one of the most recurrent themes across the middle class aspiration segment was a home of it's own.

That seemed to long be a thing of the past with the boom in the home-loan segment by the end of 2000. Imperceptibly, this last few years the prices in the real estate segment are increasing to heights that the average lawful hard working indian cannot reach.

Rediff reports on Why real estate prices are so high?

Two issues should get attention. First, it is natural for house prices to climb when the economy is doing well, incomes are rising and interest rates are low. All those factors encourage investment in housing, so demand increases and there is nothing wrong with that. The issue that should get attention is the supply side: What are we doing to ensure that supply grows with demand, so that prices stay reasonable? The answer is: Precious little.

It might seem logical that there should be land scarcity in India's crowded cities, but the truth is that the scarcity is mostly the result of faulty policy.

The second issue is the negative impact of high real estate prices. They lock the majority out of the housing market, and make more distant the dream of owning a home in a country where the majority in our cities are not home-owners, and the majority of home-owners crowd their families into one- or two-room apartments.

The second negative consequence of high real estate costs is that they drive up wages-because it has become more expensive to live in a big city. In other words, the competitiveness of Indian companies suffers.