may be you can factor in this fact: the services (and hence salaries) are no longer driven by a value based pricing model. i.e., companies no longer come to bangalore because we are cheap. they now come to bangalore because people have expertise (both domain and technology) here. so the companies can command a pricing power on par (or even at a premium) with international outfits.

so my guess is that the living stands, prices, pays and, to an extent, cultural values will get on par with silicon valley, and then we are looking at a stop to the bubble. i.e., Rs.2 crore apartments and 50-lakh pay scales. until then, it’s an upward ride.

One one had the cost of living in Bangalore gets so high that you need this much income to afford what’s increasingly becoming a reasonable life (it’s all debatable I know, but let’s assume a house/flat, some mode of transportation, and some savings left over given that medical insurance is not yet all popular). I recall that maybe 4 years back Prestige villas were 45 lakhs each and a 3 bed condo could be had for 15. The salaries were in the 5-6 lakhs range for an experienced professional. These days the salaries are int he range of maybe 15-25, but housing market has gone into the 2 crore range.

I am not going to call any of this an ‘irrational exuberance’ as there is clearly some substance behind all this. The question is, is there enough substance? IT is still only a small percentage of the GDP, that’s in a way comforting.

Anyway – Anil, thanks for providing us all with a good view of the bangalore life. Keep it all up, it is the hands-on information we have been looking for and seeking among all the blogs

Copy cat that I am