The local real estate markets in India.

Here is the scale I use:
1: Investment is Highly justified at the current price(implying that there is no bubble and hence may not see any major correction)
2: Investment is justified (Implies that the growth story of the city looks good)
3: Investment is very risky( implies that there may be a major correction in the next 2-4 years)

Delhi(1.5): Has many be industries around. It is not just IT dependent economy. Hence the prices of homes and rents may see some correction but not a major one.

Mumbai(1): Highly diversified industrial city. IT industries are well located in Mumbai as well as Pune. The real estate prices have not gone over the roof. They are very stable. Extremely good Rent/Cost ratio for real estate investment.

Chennai(2) : Real estate prices are touching the sky. Madras has well diversified industries. In the past 2 years it has received all the major IT investments. Real growth can be seen soon in this city. Real estate investment at current level prices in the Mahindra City belt and Mahabalipuram belt may be justified.

Bangalore(2) : The concentration of IT companies is the highest in this city and hence this city has the highest job opportunities. The real estate prices are already sky high and may stay so because of the unparalleled opportunities. If the government can improve the infrastructure in the next 3-5 years, things will be great in this city. Prices may not go up more than 20%. This city has more or less reached its peak.

Pune(2): Again a well diversified industrial city. Soon, Mumbai and Pune may be viewed as twin cities who complement each other. Pune has great climate, proximity to high number of educational institutions and the advantages of being closer to Mumbai. While most of the states in India have only 1 city dedicate towards IT development. Maharashtra spreading the IT investment between Mumbai and Pune for its own advantage. A trend that Karnataka is following with the development of IT parks in Mysore, besides Bangalore. real estate prices are high. If Maharashtra remains a laggard as it has been compared to Hyderabad, Chennai and Bangalore, in the IT investments, then Pune's growth may stagnate.

Hyderabad(3): This city has a very scary picture. It is completely IT dependent city but not as many IT companies so as to make it the number 1 destination for all IT folks, because the kind of IT jobs in Hyderabad are not as god as they are in Bangalore, Noida and Chennai. Not as diversified as other India cities mentioned above. The real estate prices are as High as Mumbai, Delhi and Chennai. But the rents are the lowest. Which point towards a bubble. In the past 2 years, the government of Andhra Pradesh has done nothing but just declared that companies will come and invest in Hyderabad. Till today none of that has happened. The biggest failure has been the Fab City. No new big projects have come up. They only project that the current government is doing is to develop the International airport, which was already proposed by the previous chief minister,Chandrababu Naidu.