(3 votes, average: 4.33 out of 5)We had briefly covered the topic of home valuation earlier. You can find the articles here and here. There is a lot more to be said on the matter though. So, you may keep finding the subject cropping up here in the future.
For instance, which is the best Indian city to buy a home in ? Here, I am speaking purely from an investment perspective; so the livablity of the cities don’t enter the picture. After all, best city to live in is a question that can never be resolved since we will attach different weightages to different factors. It is a very subjective decision whereas investment can be viewed objectively because of its inherent measurability in monetary terms. Â
Anyways, the answer is easier to come by than you may think. Lots of research has been done on this topic and the consensus is that cities that are already on the growth path is likely to move up the ladder far faster than those that have yet to get their place in order. For example, if you were a Malayalee and wanted to invest inside Kerala you will want to invest in either Kochi or Trivandrum as opposed to say Thrissur or Palakkad. This is inspite of the fact that the real estate costs are far higher in the first two towns!
Reminds me of the well worn parable of driving a car using the rear view mirror (use the front windshield, dummy!). The analogy was actually created to make people ignore the past events and to focus on the likely future trends. Ironically, in real estate markets the opposite is largely true and we have to drive using rear view mirrors.
Check out these two links - here and here. Â They should tell you pretty clearly which Indian cities show the best likelihood of growth going forward. In case you are too lazy to click on the links, let me give it you in one word - Bangalore (despite all the traffic mess we keep hearing about).
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Eric Hundin
Well, guess what.. I got it wrong in the above article. Apparently, Bangalore is only second in the growth stakes in India. Number one is Surat with an annual growth of 11.5% over last 7 years.
http://www.rediff.com/money/2008/jan/29gdp.htm
http://economictimes.indiatimes.com/articleshow/2736233.cms
Thanks for the kind words, Eric. We hope to keep this going. Your support means a lot.
Like you said when it comes to individual interests , everyone considers various weightages , but otherwise , Bangalore is appropriate considering its growth rate and cultural compatibility.
Bangalore is generally identified as a place where IT dwells.Bangalore real estate could manage to double the sale when compared to last year. The well-admired segment of real estate in Bangalore is apartments. Bangalore real estate properties are usually most glorified than any other city in India. In turn real estate sector is observing stead-fast, so buying a piece of land is a high-quality idea. Not only is the residential sector gaining popularity, but there has been amazing development in commercial areas.It is worth spending a part of your income in Bangalore real estate, especially to the working lots that are capable to spend for stable residence. The property could be rented out and so it can be a source of income for a regular basis. Thus Bangalore real estate gives a change for career seekers as well to develop with overall developed city. The best feature is that Bangalore rent payer do not mind paying extra rent too as it is convenient and proximity to their workplace. Another option for people that cannot entirely invest their income on buying property is city home loans.I have shared a lot more viewpoints in my blog-realtydigest.blogspot.com
hey Ria, thanks for that detailed comment of yours and also for visiting aavaas….
@Ria,
The same could be said of other metors like Chennai/Madras where IT is making it big.
I found your blog by chance while googling for some real estate blogs. I must say that this is very interesting post. Although I work for one of Toronto realtors here in Canada, I am interested in United States real estate market as well. I’ve never really dealt with Indian cities but it is interesting to see which of them are best for investments and why. However, I don’t think that “cities that are already on the growth path are likely to move up the ladder far faster than those that have yet to get their place in order”. In several years they may be on the same position although it doesn’t seem probable right now. We’ll see.
“In several years they may be on the same position although it doesn’t seem probable right now.” I agree with you !!
Nothing rules out a bottomranker from suddenly shooting up. After all we can’t really forecast things like an oil discovery or sudden infrastructure spends due to some odd unconnected reasons like national budget etc.. But on the whole, as a rational investor we try to ensure that each one of our bets work in the optimum way and we try to minimise our risk. We only do what is probable and spend little time/energy on the improbable items.
[…] while back we covered our take on the Best Indian city for Real Estate investments from an investment perspective. We have received lot of comments following that article and that […]
To William - you are right in general, on the other hand, if you choose investment in city which is developing quickly at first sight, you can be sure hundreds of other investors are heading there too. To be on the top, you have to be the pioneer, you have to explore new potentials and hidden gems. But that’s risky of course. So I have to agree with my collegue from Toronto (I am working for Vancouver condos realtor) that jumps are possible and they are fuel of our business.