How much appreciation can be expected by investing in big cities?

Prices typically increase by 10 percent annually across city areas. If you are investing in a new property in a virgin corridor where construction work is yet to begin, then costs are very low before infrastructure reaches the new corridor. Once infrastructure work starts to increase prices by around 25%. As the production of the property hits halfway point, the price decreases by another 25 percent. A further 25 percent increase happens six months after completion. There is another 25 percent rise in prices until the ownership is turned over. This is true in areas where construction is taking place in Greenfield.

The mid-end and inexpensive segments of housing will show healthy capital-value appreciation from a low base in the short term. High demand real estate yields lower appreciation prices. In new growth corridors where work on infrastructure precedes real estate, value growth is typically about 50-70 percent. Those are broad estimates, however.

There’s another return in which the rental yield is not factored in. Land worth accomplishes the real potential when the neighborhood is complete. If you are a long-term owner and you want to wait before the property hits full value, rent the property and capitalize on monthly rental returns. The annual yield is calculated as a ratio of rental value to capital. Residential property normally yields a simple 2-4 percent yield.

Appreciation is largely dependent on the growth of manufacturing, commerce and infrastructure in the region. Project-specific price changes in certain markets can be predicted. This explicitly affects programs that are being implemented or are about to be finished.