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What is the Average Wages of People Living in Chennai?

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What is the Average Wages of People Living in Chennai?

Last updated: June 18 2014
24 | Posts
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  • #21

    #21

    Re : What is the Average Wages of People Living in Chennai?

    Originally posted by sunr2i View Post
    If you find 1 of them successful then there are 999 failures or just surviving.
    Don't you think the one successful guy makes way lot more money than ordinary individuals.

    I mean 1 in 1000 businessman makes lot more money than 1 in 1000 IT worker.

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    • #22

      #22

      Re : What is the Average Wages of People Living in Chennai?

      I do not think it is relevant question. Irrespective of the answer the impact on RE by small business owners are not correlated!

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      • #23

        #23

        Re : What is the Average Wages of People Living in Chennai?

        Originally posted by k11 View Post
        Don't you think the one successful guy makes way lot more money than ordinary individuals.

        I mean 1 in 1000 businessman makes lot more money than 1 in 1000 IT worker.
        I don't think the top 0.1% in Biz would make more than the 0.1% in IT. Think about the tons of vegetable vendors, platform/petty shops, tea shop owners etc. They form the majority of the small businesses in India.
        Floor/Median(Biz) <<< Floor/Median(IT)
        Ceiling(Biz) >> Ceiling(IT)

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        • #24

          #24

          Re : What is the Average Wages of People Living in Chennai?

          some interesting read about TCS:

          TCS may soon be world's second biggest tech employer - The Times of India

          -81% of net headcount addition in 2013 were freshers
          -cost per head count rise in the past 7 years

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          • #25

            #25

            Re : What is the Average Wages of People Living in Chennai?

            The yardsticks used for RE property valuations in developed countries cannot be applied directly to Indian RE market. The common parameters like Price to Rent ratio, land price to flat price ratio, affordability index etc can be very misleading. Let me try and explain.

            In Real Estate, The general saying is RE grows in proportion to the median income in that region. So, Broadly we can say if per capita income of Chennai is 1 Lakh and Mumbai is 1.5 Lakh then Mumbai should be 1.5 times costlier than Chennai. But in reaity we see Mumbai is 3 times costly than Chennai. In granular level valuation also depends on the kind of profession of people in the locality - In areas like OMR which is predominanently white-collared the income levels are high therefore is the affordability and price as compared to GST which is mostly blue-collared. Therefore we cannot use the same broad brush to generalize prices.

            Now, If we try to address how one's income and job affects affordability and pricing? We should first link the income to their purchasing capacity. Many of us make the mistake of looking at the average salary in the region and think its overpriced/unaffordable. We tend to overlook the fact that pricing is relative to ones capcity and willingness to spend.

            Lets take 2 cases. A self-employed businessman and a salaried employee of IT company. Lets say we have a house for 1.5 Crores worth flat and 1 ground land for sale? The question is who will buy what? In net worth terms the businessman is wealthier than the IT guy and the presumption would be the businessman would be first to buy flat..But thats not the case, A businessman borrows credit to run his business. The turnover from business would be more than returns from RE. So the businessman does not buy the flat but waits. Whereas for the IT guy the only way to buy would be to try and increase his affordability by borrowing 4-5 times his earning capacity and has to jump first at the flat. If the businessman earns profits, the first choice would be the land for him. While the IT Guy can buy only one or two properties over 10-15 years, The businessman accumulates properties as and when they earn surplus. The purchasing capacity of the businessman is many times more than IT person but the impact on flats sale is negligble.
            Unless investing in RE makes financial sense like showing increased valuation, solvency, hide black money etc. business people dont chase properties at high prices. Some people who I know dont invest in anything else but RE and Gold.

            In short, if one buys using credit then they buy early as and when they come across affordable property whereas for the surplus cash segment - They buy whichever property fits the amount they can spend.Though a locality might be rich and have many high earning individual it necessarily need not matter for flat pricing as it is dependent on loan buyers. This is the reason why we see flat prices stagnate for a long while but land price doesnt reduce.

            With regard to chennai RE, the market is resilient to income fluctuations because the market relies on businessmen, government officers, lawyers, doctors etc who have consistent cash flow that has to be invested somewhere immediately. Therefore linking RE to median wage/income in my opinion is meaningless in such micro markets and especially when RE is unregulated because the median wage sample is predominantly reflects the flats market in affordable segment and the land dealings/premium segment not impacted in anyways.
            Last edited June 18 2014, 02:04 PM.

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