Chennai is no global city in any set of imagination at the moment. But prices in RE lately inching gradually to global benchmarks. Every year to understand weather pattern I look at Australia (being first to get Summer), similarly to understand Chennai price trends look at Mumbai (5-10 years bracket). Chennai

With recent spate of deals in Chennai Luxe beckons: Builders scout for hefty pockets - The Times of India truly we have arrived and will be reckoned in future analysis. The idea is to identify RE trends in both intra and international trends including boom/bust/bubble/best practices for discerning buyers. Please feel free to post your respective local RE trends and how they compare with Chennai.

Rents are hitting the roof in Central London:
Central London rents hit £5,000 a month making it no go area for families - London - News - London Evening Standard
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  • Blr vs Mumbai

    Citizen's involvement on City urban planning and Governance?

    Mumbai vs Bangalore | Forbes India Blog

    Mumbai vs Bangalore

    03/13/2013 | 14 comments | 2953 views

    + Comment now
    It’s quite often that friends get into a discussion between Mumbai (or Bombay) vs Delhi and passions run equally high on both sides. Much has also been written about it in various magazines and newspapers. But a city that is almost never discussed in comparison is a relative new player on the Indian, urban landscape – Bangalore (or Bengaluru). Whenever I have travelled to Bangalore over the last few years, the energy levels of the city have surprised me. I am not talking about the evening or nightlife since I am ignorant about that as far as both Mumbai and Bangalore are concerned. I am talking about their roles in the new, global economy. In Bangalore, I have seen a lot more youngsters starting new companies, a general ecosystem that has developed for entrepreneurs etc. Of course, much of this has to do with the now well-known growth of the IT industry and associated entrepreneurs, whether in the area of defence, automotive applications, engineering etc.
    The race for talent remember is no longer between companies. It is between cities and what they offer the skilled talent to stay in them. China has shown us how its purposeful creation of integrated manufacturing and production networks within regions did for its dominance in global production. India lacks that scale of action, but in knowledge industries you don’t need just-in-time delivery and high-speed-cargo. You just need “place”, and “place” is what Bangalore brings to the residents who live in it, and that few other cities in India have been thoughtful of as they decay in the chaos of bad governance and under investment in infrastructure.
    It is not just the IT industry that has picked Bangalore over Mumbai or Delhi, even though those cities have more people, and thus one would assume, more talent. Various MNCs have set up their R&D centres in Bangalore too. Among these GE is the most prominent and celebrated one. Now when K P Singh of DLF fame laid out the red carpet for Jack Welch (discussed in details in Jack Welch’s autobiography, Straight from the Gut), he possibly also showed him his enormous clout in the power corridors of Delhi. On the other hand, the joint venture with Wipro would have showed GE the immense human resources potential in Bangalore and also a very different work ethic, which would likely help to attract top notch research scientists to the R&D centre.
    The availability of trained professionals, primarily engineers, dates back to before the boom in the IT industry. I not remember how or why it started (was it during Bangarappa’s time?), but the mushrooming of private engineering colleges at one time was looked down upon because many were seen as lacking basic facilities, faculties and necessary infrastructure. But possibly the demands from the booming IT and other industries forced these institutes to change where today they attract students from all over the country and are known to largely provide quality education.
    But now some city/ states have tried to catch on, most notably Hyderabad when Chandrababu Naidu was the chief minister, but what makes Bangalore different? Though every denizen complains about the dismal state of urban infrastructure and the quality of their lives in Bangalore, I believe Bangalore has two distinct advantages over Mumbai, apart from its salubrious climate.
    The first is its ability attract and retain young professionals in search of career or entrepreneurship. This is thanks to affordable real estate. Yes, Mumbai still attracts some the brightest people primarily in the field of entertainment and financial services and given a choice many of them would prefer to be in Bangalore. Poor infrastructure, particularly high cost of real estate and commuting hassles by public transportation is a deterrent to both employers and employees as far as Mumbai is concerned.
    In practical terms, Bangalore’s air is cleaner, its society safer and more genteel (certainly far ahead of New Delhi). Mumbai still attracts talent – it always has and will – but in the race for the best, Bangalore is increasingly a more attractive destination. For Indian-born talent returning home, Bangalore is again the destination of first choice. The net result is that slowly the city is also becoming one of the largest centres of activity and commerce in the country, rapidly rivalling the weight of Mumbai or Delhi.
    The second advantage that Bangalore enjoys - and a very important one – over Mumbai (and over Delhi also, I would think) is the engagement that its most prominent citizens have with the city’s administration and well being, an engagement that truly makes them a stakeholder in the city’s growth, development and well being. A resident’s awareness of the levers of power, and the knowledge that they have access to them in time of need, makes a big difference in how engaged and invested they are in the “place”.
    Let me explain what I mean. A few years back a body called the Bangalore Action Task Force (BATF) was set up. BATF had some of the most prominent citizens of Bangalore starting with Narayana Murthy and Nandan Nilekani involved and actively thinking about Bangalore’s issues and engaging with the local administration as well as the state government. It was a great example of public private partnership and was set up by the then chief minister S M Krishna. It helped that the individuals at the helm were some of the wealthiest in the world they in turn attracted others.
    BATF lost its way when Krishna lost his chief ministership, but a few weeks back another initiative was launched with similar intents – B.PAC (Bangalore Political Action Committee). On stage during the launch were present – Kiran Mazumdar-Shaw, T V Mohandas Pai, K Jairaj, Ashwin Mahesh and N R Narayana Murthy. B.PAC has forged alliances with other urban reform agencies. People from the corporate world, sportspersons like Prakash Padukone and cultural czars were all present at the launch. Read about it in Shoba Narayan’s article “The future belongs to power partnerships“.
    The most prominent citizens of Bangalore have become stakeholders in the city in a way that Mumbai’s most prominent have never really tried to – both by giving their time and their wealth. The Tata’s have looked at infrastructure issues and solutions for decades, but acting alone, they have never made any headway. Some of the richest and most prominent of the citizens have limited their interests to their skyscrapers and businesses. Bombay’s captains of industry have never come together in any platform for Mumbai in any sustainable way.
    Prithviraj Chavan, probably the best chief minister Maharashtra has had in years, has never appeared or engaged in a public forum for Mumbai with its best known citizens. This lack of engagement is felt by the people who live in a place, and when choosing where to live, Bangalore shines on a relative scale. If public pressure points are not created, there is no incentive for the system (and the people who run it) to change. Mumbai, the commercial city of India, is and will remain the milch cow; but she’s not going to be around forever if nobody feeds and tends her. The impacts of decay are very visible.
    Let me give a different example. Recently the Indian Institute for Human Settlements (IIHS),with a grant of Rs50 crores from Nandan Nilekani and Rohini Nilekani, has been set up in Bangalore. Among others Hemendra Kothari and Uday Kotak, both longer-term residents of Mumbai, have added Rs10 crores each. Why do institutes like these do not come up in Mumbai? Prohibitive real estate costs and political ineptitude are two of many reasons. Remember how Mumbai lost the Indian School of Business (ISB) to Hyderabad when state politicians demanded reservations for local students? The only educational institutes that come up in Mumbai are those that are run by politicians and we know why (think land).
    This race is no longer between Mumbai and Delhi and Bangalore. It is a global landscape that these battles for talent are being fought fiercely, although intra-country battles will continue, especially in a country as large and diverse as India. Cities have to look at themselves carefully and do what it takes to renew and stay relevant to their residents. If you don’t have the right people, and if they don’t choose to come and stay, you will never have the businesses that need them. Kolkata lost it many years back. Now Mumbai is losing its competitiveness, even while Bangalore is gaining its. Agree?
    (Tanzeel Merchant co-authored this piece along with Anirudha Dutta. Tanzeel is an architect, urban designer, writer, and flâneur. Tanzeel is leading the efforts of the Regional Municipality of Wood Buffalo (home to the community of Fort McMurray, Alberta), working with the Province of Alberta and Energy Industry, in their efforts to plan for a better, more sustainable long-term future. He has excelled in the past in his work leading the implementation of Ontario’s Places to Grow initiatives)


    Read more: Mumbai vs Bangalore | Forbes India Blog
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  • Chennai can not be as such compared with rest of the developed cities across the world for obvious reasons. But as Investment chased in Mfg,Telecom,Ins,FDI,FII,Banking ,Infra and above all come on RE Investment through PE ,FDI , it is set to boom as it is lagging behind Mumbai and Delhi by 30 years

    When Bombay City development Plan started way Back in 70s, we saw little heights in 90s and when it saw Navin Mumbai development in 2004 , we saw suburban development in 2008 after seeing the spike over there . That only pulled several Pan India operators to have agent and camp here to cater to the segments occupied by Para 1 and needy supporting wings in Local Area.

    Elsewhere in the world or for that matter anywhere in the world, Coastal Metro cities enjoy Premium and Sustained developments even after Tsunami,RS of 7.5 + in seismic angle time and again with Bubbles,Bursting,boom and bust as smart money always chase the known topography than demography for tangible returns and Investment if not be in that former sense always
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  • This might be a good thread to post this link in

    10 Most Expensive Places to Live in the U.S. - Yahoo! Finance

    In comparison numbers that probably make sense (caveat - some are purely imaginary and just for fun)

    Market prices in Chennai:
    Half-gallon of milk - $0.74
    Monthly rent - $364
    Home price - $118,181
    Gallon of gas - $4.391
    Haircut - $1.45
    Movie ticket - $2.18
    Bottle of wine - $169.09 (includes petrol to travel and source from Bangalore :P)
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  • I live in one of the cities in the list. But, I think any day Chennai is more expensive than any city on that list, when you don't compare the raw numbers, but take salaries into the picture.



    Originally Posted by SmartCard
    This might be a good thread to post this link in

    10 Most Expensive Places to Live in the U.S. - Yahoo! Finance

    In comparison numbers that probably make sense (caveat - some are purely imaginary and just for fun)

    Market prices in Chennai:
    Half-gallon of milk - $0.74
    Monthly rent - $364
    Home price - $118,181
    Gallon of gas - $4.391
    Haircut - $1.45
    Movie ticket - $2.18
    Bottle of wine - $169.09 (includes petrol to travel and source from Bangalore :P)
    CommentQuote
  • Originally Posted by SmartCard

    Bottle of wine - $169.09 (includes petrol to travel and source from Bangalore :P)

    One thing I like in Bangalore is that you can get liquor in some regular reasonably priced restaurants (not just star hotels). I don't know if it's possible in Chennai, but I noticed that in many regular restaurants filled with families in Bangalore you could get at least Beer and Wine along with food .
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  • I do not like Salaries, becasue there is a huge gap. You need to calculate salary levels of buyers only. More than one-third the people are poor so no need to include them in average. Very difficult to calculate average. Median income of prospective home buyers is more important but it is hard to get.

    It is not like foreign countries where a garbage guy makes nearly as much as a IT guy in a software company.

    We can look at price of a middle class apt in suburbs and buying capacity of IT worker and regular NRI workers. Bulk of the upper middle class/NRI purchases is around 70L-1C for a 3-bhk. 2-bhks range around 50L.

    As long as people can get something in this range we do not have to worry a lot. If projects go outside of this range and do not move into premium segment, it will remain in the market for sometime.

    Market is efficient, there will some self correction across a period of time. Supply also comes in when it becomes attractive and price competition will bring the prices in line.
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  • Tokyo Tops List of World's Most Expensive Cities | TIME.com

    The top 10 most expensive cities are:

    10. Geneva

    9. Caracas

    8. Paris

    7. Zurich

    6. Singapore

    5. Melbourne

    4. Oslo

    3. Sydney

    2. Osaka

    1. Tokyo

    Not one US city in the list.

    I think US far more cheaper to live than many other developed countries.
    CommentQuote
  • k11,
    Agree with you, but my general comment was w.r.t a city being expensive. For this we need to think about how the city is affordable to most people not just NRIs or IT guys or media/cine tycoons. If you asked me to take a wild guess on median household income, I would guess it's probably not more than 15,000 Rs p.m which won't buy you a comfortable life in Chennai. But a median household income (heck, even a 20 percentile income in the cities in the US would buy a comfortable living)

    As for RE, I think you might be over estimating the IT salaries in Chennai. Chennai, unlike Bangalore, doesn't have huge footprint of product companies. It's mostly services companies like TCS, CTS etc which are not known to pay that well.They dont care for the quality of software they produce (and hence quality of the engineers), but care more about headcounts to bill for (and hence try to squeeze the pay margin).
    Just my 2 cents.
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  • From the article,
    "The chart also lists the least expensive places in the world: Karachi and Mumbai tie for the ranking."

    Mumbai and least expensive in the same sentence. I'm failing to get the joke. :)

    Originally Posted by Economist
    Tokyo Tops List of World's Most Expensive Cities | TIME.com

    The top 10 most expensive cities are:

    10. Geneva

    9. Caracas

    8. Paris

    7. Zurich

    6. Singapore

    5. Melbourne

    4. Oslo

    3. Sydney

    2. Osaka

    1. Tokyo

    Not one US city in the list.

    I think US far more cheaper to live than many other developed countries.
    CommentQuote
  • Originally Posted by Economist
    Tokyo Tops List of World's Most Expensive Cities | TIME.com

    The top 10 most expensive cities are:

    10. Geneva

    9. Caracas

    8. Paris

    7. Zurich

    6. Singapore

    5. Melbourne

    4. Oslo

    3. Sydney

    2. Osaka

    1. Tokyo

    Not one US city in the list.

    I think US far more cheaper to live than many other developed countries.



    Its hard to draw a comparison which i fail to get many times
    Please check following links
    CNN/Money: Highest income zip codes
    List of highest-income counties in the United States - Wikipedia, the free encyclopedia

    These top 2 counties have the BEST schools, BEST economy ( no recession in 2008 no recession in dotcom burst, steady solid strong balanced job market and now very hot RE market with prices back to 2007 pre crash levels back )


    I live in one of the 2 counties in the top 2 income earning list above that shows the affluence in the area
    Home prices

    Town homes - 1 car garage - 350-450K
    2 car garage - 400-550k
    Single family - 2500 -3000sqft 2 levels + basement - 550 -650k
    3500 - 4500 sqft 2lvels _+ basement - 650k 750k

    Lets take Great Falls VA as an example city percapita income is 160K very rich community , fantastic schools, diplomats, kings, dicatators, politician and yes good amount of RICH indian community lives here.
    Prices for 1M you get a nice 1 acre 3000-3500sqft built house
    Very nice houses yes 20-30 year old but these are not 20year old in india they look brand new and kept well renovated changed refurbed

    By any means / comparison this is cheaper than anna nagar, adayar, besant nagar, crap any where in ECR till corp limits

    Im comparing the BEST RICHEST MOST AFFLUENT COUNTY/ ZIP CODE in US with communities in chennai
    Any day US is cheaper the comparisons of NYC, SFO, WashDC etc makes no sense because they are cities whereas mainstream america does not live there i can bet 99% of the US based IREF members not live in one city in the list
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  • Originally Posted by Economist
    Not one US city in the list.

    I think US far more cheaper to live than many other developed countries.

    Yes, US home prices are far more cheaper. No comparison at all.

    Manhattan and Brooklyn are among most expensive, but rest of US cities are much lower. There is a huge gap between NYC and the rest.

    For $1MM, 5.5C it is easy to get a small 2-bhk apt in Manhattan. In rest of cities you can get it for under $400-$500K, 2-3C.

    Though US prices look cheap, the problem in US is the maintance and property taxes. Both are crazy high. Tax is like 2-3% of apt value every year in big US cities (most of them) and the monthly maintainance is like 40K per month for a 2-3C apt. Luxury units have much higher rates.

    US is no where in the pciture when you include UK, Europe and Asian cities.
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  • Originally Posted by randomguy
    k11,
    Agree with you, but my general comment was w.r.t a city being expensive. For this we need to think about how the city is affordable to most people not just NRIs or IT guys or media/cine tycoons. If you asked me to take a wild guess on median household income, I would guess it's probably not more than 15,000 Rs p.m which won't buy you a comfortable life in Chennai. But a median household income (heck, even a 20 percentile income in the cities in the US would buy a comfortable living)

    As for RE, I think you might be over estimating the IT salaries in Chennai. Chennai, unlike Bangalore, doesn't have huge footprint of product companies. It's mostly services companies like TCS, CTS etc which are not known to pay that well.They dont care for the quality of software they produce (and hence quality of the engineers), but care more about headcounts to bill for (and hence try to squeeze the pay margin).
    Just my 2 cents.


    15K is too low man.

    In my building, full time driver make 12K. Part time maid get 4K, they do work an additonal job too at house or office.

    Daily labourer unskilled guy at construction site makes 600rs. We paid our electrician 25K for 1 week work, rewiring our whole apt. I paid a guy 2.5K for putting home theater speakers, took 6 hours of work. My dad gets labourers to our properties at 500/550+food+tea+transport for a day.

    15K is more like a lower end income per person. At household level it is crazy low.
    CommentQuote
  • Originally Posted by k11
    15K is too low man.

    In my building, full time driver make 12K. Part time maid get 4K, they do work an additonal job too at house or office.

    Daily labourer unskilled guy at construction site makes 600rs. We paid our electrician 25K for 1 week work, rewiring our whole apt. I paid a guy 2.5K for putting home theater speakers, took 6 hours of work. My dad gets labourers to our properties at 500/550+food+tea+transport for a day.

    15K is more like a lower end income per person. At household level it is crazy low.


    Yeah, I could be off by a lot.
    My guess of median household income is based on some assumptions like 20-25% of people below poverty line and majority lower income groups have one earning member in family. Hourly rates for low skilled work is high, but they may not get jobs everyday to clock lots of hours monthly. Considering the high population below poverty line, 50th percentile income is most likely lower middle class. But yeah, I do think my number is little towards the lower end and I hope it's higher.
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  • Originally Posted by randomguy
    majority lower income groups have one earning member in family


    What I have observed is that poor people generally have multiple incomes. Housewife's are more of middle class and rich phenomenon. Most women work, there are seperate rates for women. Even children work during holidays and summer. Old people end up working as watchmen, some or the other job.

    Chennai is going through a major labor shortage. Low end people are doing fairly good. Their incomes can only go up.
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  • The saddest part is that this huge labour charge is tax free and we must add 33% on it to arrive at their purchasing power or money value.

    My driver takes 12000 that is 16000 in my salary slip before tax deduction where when it goes to him it becomes 16000 in his pocket without tax. Huge gap of 8000 is there in the air

    Originally Posted by k11
    15K is too low man.

    In my building, full time driver make 12K. Part time maid get 4K, they do work an additonal job too at house or office.

    Daily labourer unskilled guy at construction site makes 600rs. We paid our electrician 25K for 1 week work, rewiring our whole apt. I paid a guy 2.5K for putting home theater speakers, took 6 hours of work. My dad gets labourers to our properties at 500/550+food+tea+transport for a day.

    15K is more like a lower end income per person. At household level it is crazy low.
    CommentQuote