Is a wide disparity in rates and lifestyles between leading cities sustainable, asks Sonal Sachdev
Every city is unique. Each has its pluses and minuses and living in one city can be drastically different from living in another, especially if you are talking of living in your own home. On a recent visit to Bengaluru, I happened to glance at the realty rates per sq. ft published in a supplement accompanying the morning paper. Guess what? In Bengaluru, you can get a home on MG Road at a rate of little over Rs.20,000 per sq. ft. Try Marine Drive in Mumbai and the asking price is upward of Rs. 70,000 per sq. ft. In fact, the Bengaluru realty rate sheet is almost entirely filled with four digit numbers. For Mumbai, the rates are mostly in 5 digits.
What this spells in terms of living spaces is quite interesting. Hoardings leading into Bangalore city from the airport don’t showcase homes priced economically. The advertisements mention price tags of Rs. 5-7 crore. Clearly the city has people with money—IT dollars et al. So what’s being offered, are luxurious homes and villas spread over thousands of sq. ft that a resident of Mumbai can’t even dream of. We are talking palatial homes versus cubby-holes, and a sprawling lifestyle versus tucked-in living.
This begs the question: is such a wide disparity in rates and lifestyles between leading cities sustainable?
Historical evidence suggests that while appreciation has been quite significant in most metro markets and upcoming towns and cities, the bigger metros have also recorded handsome gains despite the rate-gap. To therefore invest in a house in any city on any simplistic assumption of the gap narrowing would be unwise. However, what can definitely be a sound proposition is a second home in another city.
Some metro markets like Bengaluru, Chennai, Hyderabad and Kolkata today offer homes at relatively cheaper prices than Delhi or Mumbai, with near comparable urban lifestyles. Having a luxurious home you can retire to in one of these cities today has a distinct appeal. And prices in these cities aren’t stagnating either.
The other option, for those married to their cities, is to look further and beyond the main city area, as it is at present. Promising metro suburbs can be feasible locations for a second home. Remember, the old city loses its charm and the new emerges as the hub of activity over time. For those in NCR, the road from Gurgaon is getting closer to Jaipur. In Mumbai, Thane and Navi Mumbai are emerging hubs of activity.
If you are looking for another home in the New Year, look beyond your city. You might just be in for a very pleasant surprise.
Formerly Editor, Outlook Business and Executive Editor, NDTV Profit, the writer is now an entrepreneur and takes keen interest in personal finance. Contact him at firstname.lastname@example.org