You have done a very detailed study. But then if you compare Chennai with Bangalore, Real estate prices in Bangalore have come down and indications are that it will further come down. IT Hub is Bangalore. It is coming down primarily because buyers do not see buying property as a good investment. Interest rates have gone up considerably and today if you borrow 50 lacs, you will have to pay around 55,000 per month towards instalment. Even if you have the luxury of both husband and wife working, still a repayment of Rs.55,000 per month for the next 18 to 20 years is a big commitment. The assumption is that the balance you invest from your side. ie. upto 20 to 25 lacs. This will be life their time earning.
People in Bangalore have realised this and have stayed away from investing. Lets not forget that most of the deals are inflated by the middlemen. Unfortunately in india we do not have a organised set up for real estate.
I am convinced that at current levels there is no way property prices can go up further. Therefore every reason to believe that the excess supply and availability of land should help in prices coming down.
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Originally Posted by moorthy64
I have been living in Chennai for the last 3 decades and the prices I hear today are mind boggling. Places like Alwarpet and R.A.Puram quoting more than Rs.10,000/- per sqft.( Residential). Rental have not gone up in the same proportion to justify investment. Salary levels have not gone up to induce purchase at these levels. Peripherals of Chennai have seen stagnation and prices have fallen in the last 6 months. Transactions have come down considerably. These are clear signs for correction in price which should happen in the next 6 months.
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