Thursday, October 11, 2007

Future cities in India

My thoughts on Indian real estate market

Its so hard to comment on it. The only similar comparison in terms of performance is Google shares. While the bears cry for their demise reports are there in both sides. Are people buying the hype from a Wharon article and more money coming to India. I thought a stronger rupee will delay the party but alas its going guns as usual.

I think if you have any money and can afford a decent cash flow you should invest in real estate. I am happy to see bears among us. Like Fred wilson said. If every one says the party is over the contrarian in me says no.

Why should you invest. India is a growing country with higher GDP and the development is in accelerating phase. More and more money is there in the country due to young crowd and rising middle income.

India has less people in the city nearly 28% compared to 40% in China. Rising salaries and growing of IT cities are definitely key drivers.

Where we should invest in..

Tier 1, Mumbai, Chennai, Delhi, The prices are already peaked in this areas. I am not saying its going higher but these properties have a easy in and out. Since there is always takers. Definitely the prices are higher but I think the growth in this area is gonna be slow when compared to the Tier 2 cities. But definitely in the liquidity side its very easy.

Tier 2. This is where a middle class should invest in. You make a decent amount of money to pay your bills and have some money left for savings. Please do a favor for yourself and invest the money in Land rather than in deposits. I am sure that you guys can afford a decent mortgage and pay it off.