4 October, 2023
Unlock the doors to real estate success
Read time: 5 minutes

In today's edition:

  • In the news: Guidance value, Outlet malls, revenge travel
  • My thoughts on: vertical cities
  • Q&A: Character traits

Handpicked stories from my weekly digest

Here are the 5 stories that you need to be aware of from this past week:

  • Investment destination: Apartment costs in Bengaluru have jumped by 10-20%, with the outskirts witnessing the maximum hike, after the increase in guidance value by the state govt on Oct 1. Guidance value is the minimum value at which the sale of a property can be registered with the state govt. It is known as the circle rate in some states. Read more
  • Customer is king, finally: As home buyers are getting more empowered by legal reforms, builders are having to step up their game. Customer satisfaction is becoming an exceptionally important KPI for developers. In fact, branded builders who are sensitive to criticism are benefiting the most. Read more
  • Worth keeping an eye on: Outlet malls - a common sight in the West - are slowly gaining pan-India popularity. These are generally large malls with factory outlets that sell retail merchandise at discounted rates. Typically located on the outskirts of a city, large-scale adoption of this retail concept will impact real estate prices and development profoundly. Read more
  • Credibility rating soars for India Inc: Companies reliant on domestic consumption in India are averaging their highest credit ratings in the last decade. As cash flows are bolstering balance sheets, investments in capex and growth are expected to be robust. Read more
  • Revenge travel is dead: Post the COVID lockdown, people started queuing up to get out of their homes. This trend lasted for 2 years and what characterized it was people's willingness to compromise for the sake of exploration. This has changed drastically as bliss takes priority once again. Read more

Rising to new heights?


Image credits: Pixabay

Urbanization is a global phenomenon, with over half of the world's population now living in cities. This rapid growth is putting a strain on land resources, infrastructure, and the environment. Cities are faced with a critical choice: to expand horizontally or grow vertically.

Horizontal expansion, which involves spreading out over a larger land area, is a traditional approach to urban growth. However, it can lead to a number of challenges, including:

  • Land scarcity: As cities grow, they compete with agriculture and other land uses for limited space. This can drive up land prices and make it difficult to afford housing.
  • Traffic congestion: As cities spread out, commute times increase. This can lead to air pollution, wasted time, and reduced productivity.
  • Infrastructure strain: Horizontal expansion can put a strain on existing infrastructure, such as roads, water systems, and energy grids. This can lead to service outages and increased costs.

Vertical growth, which involves building up instead of out, offers a number of advantages over horizontal expansion. However, we have only seen Mumbai develop an expansive skyline in India so far.

Today, I want to explore why this is the case and when vertical growth become a reality that cannot be ignored.

Slow adoption

There are a number of reasons why vertical growth has been slow to take off in India, despite its many advantages. Some of these reasons include:

  • Government policy: The Indian government has not historically been supportive of vertical growth as evidenced by strict FSI regulation. However, there are signs that this is changing, with the government now recognizing the need for more compact and sustainable urban development.
  • Economic considerations: Vertical growth can be more expensive than horizontal expansion, as it requires more investment and technical know-how in infrastructure.
  • Infrastructure capacity: Many Indian cities have limited infrastructure capacity, which makes it difficult to support rapid vertical growth.
  • Cultural and historical context: India has a rich cultural and historical heritage, and many people are actually reluctant to see their cities dominated by tall buildings.

Embracing vertical growth in smaller cities also poses demographic and economic challenges. These cities may have lower population densities, which can make the economic viability of vertical development less apparent. Furthermore, attracting the necessary investment for high-rise projects in smaller markets can be a considerable hurdle. Balancing the preservation of a city's unique character with the need for modernization and efficient land use is an intricate dance in smaller urban centers.

So When Does Vertical Growth Become Inevitable?

Vertical growth becomes imperative when cities face a convergence of factors, including high population density, limited available land, and the urgency for sustainable urban planning. Mumbai, often cited as a prime example, was driven by severe land scarcity. Bengaluru, on the other hand, expanded its borders into the outskirts where ample room was available.

As India's population continues to grow, the challenges of horizontal expansion will only become more acute in larger cities. This is when vertical real estate planning will become increasingly important as a way to manage India's urban growth.


I'm not able to decide which agent to go with to look for a home. Any tips?
- Sparsh

Hi Sparsh,

FYI, you can engage with multiple consultants and don't have to limit yourself exclusively to one. The consultant who helps you find your dream home will be the one who makes the fees. That said, one thing I believe will help you pick the right partner is: see whether they shy away from the tough conversations.

Have a question? Reply to this email - if it's relevant to the broader Open House community, I'll feature it here!



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Disclaimer: This newsletter is intended for informational purposes only and should not be construed as professional advice. Please conduct your own due diligence prior to making any decisions.

By Ashwinder R. Singh
Step up your real estate game with exclusive access to tribal knowledge accumulated over decades.
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