What Source do you want...the nos. are for real! Also this feel good dream has brought the price of outskirts from 500 psft to 3500 psft within 6 years. However as the pace of growth has slowed down from 30% to 20%, am sure the rise will slow down but not halt.

I am not a proponent of high price without significant increase in Infrastructure, however salaries and hence the buying power is still increasing.

Q1 is always weak as people move after the salary hike but the growth rate is real. At 83% utilization, TCS needs to add people very quickly. Infy's net addition was more than 1500. Historic trend is that most people get added in Q2 (graduates finish there term in college).

the massive enrolment in US is 5% increase over past year. Also, the entry level salary of 25K -30K doesn't excite a graduate.

These are net new jobs being created & all new comers need a house for his needs and another to show off to others back home.

Read this!!!!

Is there any great logic to real estate prices or is it just the land, builders and the bank mafia that is responsible for keeping the prices high?

Well let us look at the irrationality.

Ahmedabad offers land, people and electricity (the needs for a BPO) at 50% of the prices in Malad or Goregaon. However there are more back offices in Malad and Goregaon than in Ahmedabad.

Bangalore has more high paying jobs than Chennai, but Chennai real estate prices are at least 50% higher than Bengaluru.

Navi Mumbai has power cuts for 4 hours a day (many parts) but the great Maharashtra government will not allow Tata Power to supply or distribute power in Navi Mumbai.

Infrastructure in Mumbai has not kept pace at all- but prices in Ghatkopar, Santacruz, Malabar Hill, — hardly matters which part have gone through the roof. In the UK the cost of a house is about 3.4 times the 'average income' — let us say the 'average income' in Mumbai is Rs. 5 lakhs (not sure if I am right)…so the cost of a house should be Rs. 15 — 20 lakhs! It is about Rs. 1 crore. When will we stop pretending that 'all is well'.

The real estate mafia in Mumbai (including some very respectable names) has kept the prices so high that it is not possible to buy without mortgaging at least 20 years of your life to the loan repayment!! If you see what the supply of office premises has done to Mumbai is that the rental market esp for office space has remained constant or people have got better quality of office for a slightly higher rent. However the rental market for residential houses is not so efficient.

If rents are not going up, but property values are going up, it is a good sign of a bubble. And like in any bubble, do not go short, just stay away!!

The author P V Subramanyam is a Chartered Accountant by qualification and a financial trainer by profession

If rents are not going up, but property values are going up, it is a good sign of a bubble. And like in any bubble, do not go short, just stay away!!

The author P V Subramanyam is a Chartered Accountant by qualification and a financial trainer by profession

I totally agree on this. That is why so many people in Mumbai prefer to stay on rent rather than buying it. Let me tell you one example of my relatives who stay in Pune (near Pune University) on rent. They were paying 55000 Rs rent for 4BHK flat in very posh society around 2-3 years back (must be around 60K now). They are very rich people and have enough cash to buy that property. However when I heard first that they pay 55000 Rs/month rent, then I couldn't believe it (as many people even don't get 55K net salary per month). But then I came to know that 4BHK flat in that posh society (in the middle of the city) costs around 3 Cr Rs. And my relatives says that they pay 6.6 L Rs per year as rent and stay in property worth 3 Cr Rs. They have cash of 3 Cr Rs, but they can put 3 Cr Rs in their buissness and can make atleast 60L Rs (20%) in one year, which will be sufficient amount to stay in that flat for another 8 years (including inflation). I see strong resemblance of this to low cost property (around 50-70L/ 2 or 3BHK) market too, where you can take flat on rent in 10-11K and put your saving of 10-15L in FD (which otherwise you would have given to builder as initial installment for buying the same flat) and you can get interests more than your paid rent. And if you have more cash than you can easily put in Mutual funds via SIP as they invest in diversified areas, so even RE goes down, other sectors like Media, Pharma, IT may go up.

People who have bought more than one flat in Pune for investments, may think of getting out of this bubble before it is too late (in terms of making profit).

I totally agree on this. That is why so many people in Mumbai prefer to stay on rent rather than buying it. Let me tell you one example of my relatives who stay in Pune (near Pune University) on rent. They were paying 55000 Rs rent for 4BHK flat in very posh society around 2-3 years back (must be around 60K now). They are very rich people and have enough cash to buy that property. However when I heard first that they pay 55000 Rs/month rent, then I couldn't believe it (as many people even don't get 55K net salary per month). But then I came to know that 4BHK flat in that posh society (in the middle of the city) costs around 3 Cr Rs. And my relatives says that they pay 6.6 L Rs per year as rent and stay in property worth 3 Cr Rs. They have cash of 3 Cr Rs, but they can put 3 Cr Rs in their buissness and can make atleast 60L Rs (20%) in one year, which will be sufficient amount to stay in that flat for another 8 years (including inflation). I see strong resemblance of this to low cost property (around 50-70L/ 2 or 3BHK) market too, where you can take flat on rent in 10-11K and put your saving of 10-15L in FD (which otherwise you would have given to builder as initial installment for buying the same flat) and you can get interests more than your paid rent. And if you have more cash than you can easily put in Mutual funds via SIP as they invest in diversified areas, so even RE goes down, other sectors like Media, Pharma, IT may go up.

People who have bought more than one flat in Pune for investments, may think of getting out of this bubble before it is too late (in terms of making profit).

you say something but mean something else



you say something but mean something else still you have not provided the source ?

Good analysis.

And people often forget IBM, Accenture, CG are one of the biggest employers in India and those are not Indian companies.

Something must be right for these companies to expand aggressively and keep expanding further in India.

just read the American story in the link below



Down but not out: Voices of the long-term unemployed | The Lookout - Yahoo! News

with this kind of stories floating in the market , people on Visas have been deported even though they had a valid visa and were eligible to enter US

it does not matter if you have a valid visa or not , and I am not talking about mom and pop body shops I am talking about wipros, Techm , infy people who were deported when they went to India for vacation .. and the Port of entry officer just said that how come you have a higher pay than me .. and that is the reason one person got deported .. so things are going to get worse before they get better .. with next year being the election year in US politicians are falling over each other to please American people I wont be surpised if they stop B1/2( business visas) Infy is the prime example who exploited this loophole and is in the dock because of the Indian babugiri attitude and general disregard for the laws of the land where they conduct business and one of the manager who works there told my friend .. pls do not have your signature in any of those contracts as the signatory is the one who is going to be held liable( that is exactly the reason why Anil Ambi is out and his top executives are behind bars) .. man you guys should start coming out from under the rock you live under..

Good info, thanks neeraj.

Increased admissions in college by even small numbers is a big trend in developed economies. I would consider even 5% as massive - there arent that many people entering college in USA - especially given that the cost of education and earning capacity from the degree have not kept pace.

US IT workers are highly productive and capable.

I didnt know that starting salary is 25-30,000 - I thought they start at about 50,000 dollars and rise to 100,000 dollars fairly quickly

25000 is what a body shop worker in Infosys would get for onsite work - that was my impression. I am not in IT, so correct me if wrong.

Couldn't agree more



TOI is a developer's reporter. Media has played the bigger role in creating a hype about rises in RE pricing from time on...

Recently saw a auction notice of TOI owned apartments in Bangalore. It looks like they get a few apartments in some places in lieu of advts revenue. Hence it is always favouring price-rise and developers/builders. No wonder. In normal terms, this is called "Conflict-of-Interest". :bab (38):

Euro 500 homes

Tatas to build world's cheapest home for Euro 500 - The Times of India

Hey gandalf. Are those hobbit homes ?

no they are nano homes ha ha ha..