I appreciate this article. The Analysis is correct that Real Estate prices are too inflated in India.
I made some comparison with other developed countries ..
USA - Average home - 200,000 (not in high cost locality) with interest rates below 7% mortgage and can fetch a rent of 1000 to 1200 USD per month
Europe (except UK) - 80000 to 100000 Euro Studio in the capitals like Paris with mortgage interest around 6% will fetch monthly rentals of 800 Euros or more
I bought an apartment of less than 2000 Sq Ft in a metro in India for 45 Lakh rupees (approx 100000 USD).. Mortgage is more than 15% interest rate.. and the rents are well below 20000 rupees per month (500 USD)...
Compare this to the Developing economies like Checkezlovakia .. Prague property prices are doubling in every 5 years and still you can get good rental returns..
I think the property prices / Mortgage interest rates / Rental returns dont match up in India..
We have to be more realistic on Rate of returns.. instead of talking about some future inflated property price return.
I think Deepak Parekh Nailed that correctly in this article.
Plus the congestion in the cities without infrastructure is amazing as I find that we are cheating ourselves .. for a 100000 USD investment in an apartment, I surely want to expect more in terms of the quality of infrastructure.
