The real estate scenario is looking quite upbeat. Real estate consultants are forecasting rising rates and home owners are definitely a pleased bunch, especially since the Budget ensured that interest on home loans still remains one of the best ways to save taxes.

Real estate consultants say Finance Minister P Chidambaram's decision to levy a 10 per cent service tax on construction would lift prices of residential housing by 4-5 per cent.

The stratospheric rise in real estate prices over the last year may compare closely with the stock market indices which are at their all-time highs. The analogy seems perfect given the difficulty involved in picking out stocks that could still yield good returns at these rarefied levels.

Real estate consultants have apprehensions of an escalation of prices, but unlike stock market players they say there are still some multi-bagger locations that may yield bumper returns to investors.

Then, of course, there are the momentum plays whose value has appreciated a great deal in the last few years. Here are a few samples -- suburban Mumbai, Bangalore, Pune, Gurgaon and Hyderabad.

However, barring one or two locations, the chances of deriving a great deal of appreciation from properties in these areas are not very good.

We asked real estate consultants to choose five best options in real estate to put your money in and suggest the best investment options for the following budgets -- Rs 10 lakh, Rs 25 lakh and Rs 50 lakh. Here are their picks:

1. Oh Kolkata!

Surprise surprise, this is the number one choice of location where consultants feel one may derive maximum appreciation. The primary reason for this, they say, is that the demand is led by actual home seekers unlike other locations where the demand is built up by investors who buy properties and sell them at higher rates, which only jack up prices unreasonably. The ensuing bubble is not sustainable at all, they say.

Realty check
City	Area	Rate per sq.ft (Rs)
Chennai	CBD*	1,700-2,600
	Suburbs	800- 1,800
Kolkata	CBD	2,200-3,200
	Suburbs	800-1,100
Jaipur		1,700 - 2,500
Chandigarh		1500-3000
Nashik		1100-1400
* Central business districts

"Kolkata is a completely rocking city," says Anuj Puri, chief executive officer of Chesterton Meghraj Consultants. He gives full marks to the state government which has been actively inviting private and foreign developers to transform the city.

Rajarhat may not be well known now but consultants say a few years down the line, this 10,000 hectare location is going to be the next hot destination for IT and ITES (information technology-enabled service) professionals. An abundance of power and water supply is the other advantage Kolkata offers.

2. Chennai -- southern superstar

The water projects announced in the Budget will make Chennai an attractive destination. The software boom and the arrival of expats have enhanced real estate prices in a major way. The government is promoting the area between Tidel Park and Kelambakkam as a software corridor.

As a result, real estate prices have doubled in that area. Prices are going up in South Chennai because that is the most preferred locality among expats. Most companies feel that Chennai offers excellent manpower, particularly in the software industry, which compares better than that in Hyderabad and Bangalore.

3. Chandigarh -- professional interest

The city has become a magnet for professionals who have fuelled the rise in property values in the city, say consultants. This, along with reforms like the Punjab Apartment Ownership Act, has eased ownership issues. Retail activity in the city is also on an upswing.

The setting up of malls at Chandigarh as part of the government's plans to develop 20-odd malls in northern India has also worked to the city's advantage.

The familiar growth driver - information technology - is making its presence felt here as well with the Chandigarh Technology Park (CTP) getting filled with more and more IT professionals.

Big names in the infotech arena like Wipro [Get Quote] Spectramind, Convergys and IBM have shown interest in the city, looking at the infrastructure and proximity to the national capital region. Consultants say prices in locations like Mohali and Panchkula have been on the rise and the trend seems to be firmly up.

4. Jaipur -- right connections

Residential space is going to be led by an IT park planned by the Rajasthan Industrial Corporation in Sitapur. Road connectivity to Jaipur, which has been improving at a fast clip, augurs well for the city, feel consultants.

GE, the company that had redefined Gurgaon, has moved into Jaipur and this has paved the way for the entry of a number of IT and ITES companies, says Puri. Besides plans of IT companies like Infosys [Get Quote] and Wipro to move in, the focus by a clutch of developers has also worked to the city's advantage.

"Gurgaon and Jaipur have been the two fastest growing cities and still have potential for further growth," says Tariq Vaidya, head of advisory services at Knight Frank.

5. Nashik -- the next best thing Nashik boasts of a Pune-like climate. Besides consultants feel that the recent World Bank loan that the city got has worked well for its drainage and sewerage systems.

Construction and development activities are on an upswing and the city also boasts better professional education and recreational facilities.

Development in the city is being done on the lines of major metros like Mumbai and Bangalore. Connectivity with Mumbai and an upcoming IT hub like Pune -- Nashik is equidistant from both the cities -- is generating a lot of demand for residential property.

Consultants feel that after Mumbai and Pune, Nashik is going to be the next hot destination for IT and ITES companies in Maharashtra.

Other cities like Kochi and Vizag are also worth a mention for their appreciation prospects, given the availability of quality infrastructure, amenities and unpolluted locations apart from the sizeable retail growth, feel consultants.

Consultants suggest putting Rs 10 lakh in a 2 BHK residential property in Nashik, Kochi or Vizag. For the Rs 25 lakh budget, they suggest 3 BHK properties in suburban Mumbai (Mulund, Vashi or Thane), Jaipur or Chandigarh. For the Rs 50 lakh budget they suggest plum 3-4 BHK properties in Kolkata, Bangalore or suburban Mumbai for getting more bang for that buck.

• Rs 1 lakh = Rs 100,000