Let us take a 3 bed room apartment with a living area of 1600 sq ft in a decent location [Jaya Nagar in Bangalore or Besant Nagar in Chennai] – it runs about Rs 1.5 crores in India or ~$380,000. I am not even talking land value, these are usually high rises that have 8+ floors.

Interest rates are at an all time high, at about 12.5% to 13.25% for 20 year fixed. [Yes, 12.5% is the minimum]. The max loans a bank would give you is about $250,000 [1 crore] and 20 year fixed is the max limit. At that interest rate, provided I put down about 50 lakhs [~$125,000] and borrow about $250,000, my monthly payment is about Rs.1,10,000 [$2,750]. Working backwards, I need to make at least $75,000 per annum sitting in India to be able to afford it.

Not too much of a $ saving from an outsourcing perspective, is it? So, I don’t have a clue what the heck people who deal with real estate in India are smoking, whatever it is, I need that !

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