Prices of real estates in Chennai - is it worth investing?

Thanks to extravagant and some times, disproportionate pay packages that software industries are offering, I don't know what good things that has happened, but certainly it has contributed immensely to the unnecessary bloating of real estate prices.

If my statement looks prudent, just look at prices of real estate over the past few years. A plot in outskirts of Chennai (much beyond Tambaram) now costs nothing less than 15 lakhs (100,000 is a lakh); it would have been less than 5 lakhs a couple of years back. A month after finishing this article, it would be no surprise if the prices have gone by another lakh. Two important contributors for this price hike - people working in software and NRI (Non-Resident Indians). Being in software, I feel sometime ashamed that we have indirectly contributed to this. Not just real estates, IT industry pay packages have made any types of rent affordable thus indirectly affecting common man who won't be able to pay that and forced to move to an outer area from the centre. This lucrative payment has made many of the house owners greedy when it comes to charging rent.

In the case of NRI, it doesn't make a difference if the constructor adds few hundred rupees per square feet thus resulting in a huge price. The difference between 35 and 40 lakhs is not going to bother a NRI because always they translate that difference into Dollars or other currency and feel that "Oh! It's just few thousand dollars difference". But in reality, if you go and bargain with the constructor, the prices can be brought down to a reasonably existing value. But this depends on factor that there is no one else to buy that. If there is another buyer, the constructor will remark "Sir - there are others who are ready to buy it at this price" indirectly meaning that "If you don't like, get out of this".

Another factor encouraging these two sects of people are the banks - particularly private and MNC banks - offering huge loans. This certainly doesn't look good and calling it as an economic growth is a stupidity. People will only realize when something catastrophic happens and then the prices back to what they should actually be. I am not trying to be a pessimist here, but this trend looks lunatic and I pity all the people who still want to invest very well knowing that they are paying more than its worth.