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Wednesday, 7 May 2014

The summer heat's at its peak and adding to the general discomfort is the noise of a long-drawn out election. Despite the noise or perhaps because of the noise, we, the general electorate, get a brief insight into the assets of those seeking our votes.

Our traditional penchant for investing surpluses in land has not changed: despite other avenues available for investment, politicians and their wannabe avatars all admit to some landholding. Investment in land or any form of real estate is easier said than done.

Everything connected with land, from change of land use to building permissions, water and electricity connections is under administrative control hence is regarded as perhaps the biggest generator of black money and corruption.

Investment under such circumstances for the average citizen is tough if not impossible. In addition to these obvious hurdles, in today's real estate scenario it is often hard to invest in land because, one, it is finite (there's just so much land going around and no new land is being manufactured) and two because clear titles to land are hard to get.

Which could jeopardise your investment if someone emerges from the woodwork and lays claim to it. So, flats. Pune is an attractive destination, both from the point of employment prospects and later on, living the retired life.

What kind of returns can one expect for one's real estate investments in this city? Sanjay Bajaj, managing director, JLL, Pune, a real estate consultancy, said historically there has been a minimum of 15-20 per cent appreciation across the city although some areas have performed better than others.

The caveat here is that you have to take a long term view. Real estate is a micro market which means that it is very location-specific. Look at rates across the city: they are higher in some areas and much lower in others. Hence, even one city cannot give you uniform returns, so micro markets.

The real estate consultancy's view on return on investment in the Pune market is that it could "increase over the next five years in areas with superior growth prospects on account of upcoming infrastructure and better planning."

To which a developer who shall remain unnamed clarified that this is where the convergence between politics and business occurs: those developers close to politicians get the civic body to create the public infrastructure (roads, etc) making the location a popular, in demand area. This leads to areas on the outskirts commanding a premium, thanks mainly to the infrastructure.

Quick Links to  Pune Real Estate

Read More : http://www.punemirror.in/columns/columnists/Returns-from-real-estate/articleshow/34647332.cms


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