"Always when you pay a lot of money, managers all over the world are expecting the best, when it's going well it is always cheap. When it's going bad it's always expensive," Guardiola told British media.
"I think he has a lot of qualities, he's so fast and runs in behind like few players in the world. But he's just 21 years old, so the gap to become a really good player is still big."
Guardiola, who managed five-time Ballon d'Or winner Lionel Messi during his four seasons at Barcelona, has seen enough of Sane so far to realise he has the abilities to become world class.
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"I can say that because I was the manager of the best player in history (Lionel Messi). That's why I know he can improve," the Spaniard added. "With this talent it would be a pity not to try to realise all this potential that he has."
City host ninth-placed Stoke City on Wednesday before travelling to Middlesbrough for an FA Cup quarter-final on Saturday.
($1 = 0.8140 pounds)
(Reporting by Aditi Prakash in Bengaluru)
