The price trends of different cities especially in residential segment clearly earmark that in past two years, the property price escalation has been from modest (like 20-30% in Kolkata) to massive ( like upwards of 70% in Mumbai and Delhi markets).

At several places, the escalation has also been in the range of 100 plus percentage. The trends in commercial segment is also no different and according to an estimate in the metros, their prices have grown by over 50% in last two years.

Coming to the crucial issue of rate of return, one could easily surmise the kind of money he would have made if he had bought a home in either Delhi or Mumbai or even Bangalore in 2004 and would have sold it in the current year. Simply an appreciation in the range of 100%. This, in fact, is the general trend here in the Indian real estate market today which has now triggered this hot debate as how long property could provide this kind of yield?

Going by the general trend, a sudden price escalation in any segment of the financial market normally stems from too much of speculative activities. While experts in India are not denying the fact that a peripheral element of speculation has set into the domestic real estate market, at the same time they are of the view that price is being driven by strong demand coming from newly empowered (in financial terms) middle class. However, the general verdict coming from different quarters veer round to the view that as construction activity will further pick up the momentum and there will be a better synergy between demand and supply, there would be a price correction and price escalation will get stabilized.

May be in the range of 15-20% on an annual basis a few years down the line. But even this figure is quite commendable which will further add to the dynamism of Indian real estate sector in the future.