Apartments in Mumbai (Suburbs!) expensive than Chicago!

Have a hearty laugh!

We Indians earning in rupees thats' valued at 1:44 to a dollar have to spend much more to buy an apartment in Mumbai's far-western suburb like Goregaon than a average American who has to shell out much lower to buy a bigger, grander and luxurious home in a state like Chicago!

Ironic? No it's the shameful greed of developers, and government apathy at work!

Chicago Grand House (Rs. 1,43,00,000)

4 BHK - 3500 sq ft+ Grand House, with Garden (Many more such properties, click here )











Goregaon Apartment (Rs. 1,80,11,914)
3 BHK - 2255 sq ft measly Apartment















Think twice before a government as greedy, and as corrupt like this is again voted to power!

Letter to Prime Minister Manmohan Singh

Respected Sir,

"A desperate starving man will always pay more for a meal than a well fed fat man"

I am writing this letter out of desperation, because, the housing sector in Mumbai is heading towards a catastrophic human disaster. Why are NRIs/Non-Indian nationals’/Corporations/Indian Investors ("Sharks") being allowed a free run in Indian housing sector? Since when did the housing sector start to become a commodity that could be sold in an auction-like manner?

Sir, I am salaried class person, part of the value-industry that is bringing dollars to India. I paid about 1/3 million rupees in taxes with an effective tax rate of 28% this year. Even for me to buy a modest 850 sq. ft. flat in Mumbai means having to part with more than 50% of my gross monthly income! What happens to my family which has old-parents, wife and kids (planned), and their modest aspirations to a good life? If I face such issues what can I say about others who are not-so-lucky?

Sir, the situation is quite obvious, Indian population has always had a very-high demand for housing. The supply, albeit, has never quite kept pace. To make matters worse now, the demand is now further increased due to buying by these "Sharks", merely for the sake of Investment. Sir, this demand from outside India is not because of any other factor but due to the statement I made above. The "Sharks" has his eyes on the starvation that an ordinary Indian has towards affordable housing in a country like ours and is quite content to "invest" his easy money into our cities and block housing units for years at end till they earn a good return.

Sir, is this right for India? Should we allow the starvation of the country become a driving force for some investors' investment greed? Why have they not participated in Indian Infrastructure projects, why isn’t a NRI willing to dedicate 6 months of his services to India, surely it is going to reward him well, but I think the answer lies in a simple fact, they probably don’t care!

Sir, my only request to you is to not look at the Housing Sector with an Economics or Trade viewpoint, rather this subject needs to be given a Humanitarian and Socialist ear and mind.

Sir, to conclude, I would just ask you this: What would've Mahatma Gandhi done if he was to see the ground realities of the shameful greed on show in the housing sector of this country?

My sincere regards to you!

Yours' Truly

Mumbai Real Estate Bubble

For the last few days' I've been property hunting, not the old-fashioned way, but really in "information-age" way!

I've been tracking the stock markets, global markets, builder quotes, industry watchers' opinions, and ofcourse the one important entity, the average man.

Based on initial analysis it is quite clear that unlike a bubble that manifests around a central point, the Real Estate story is quite asymmetrical. Instead of being focussed on a single entity, this ones' largely revolving around atleast five crucial elements, hence its' more of a "Pentabble" than a bubble :)

What am I talking about? Here are the five reasons around which the Mumbai Real Estate story is centered.

1. Collossal Influx of Capital in Early 06 (see Nifty90-07), there is do denying that post Jul-03 there has been a steady inflow of investments, particulary from FIIs', Hedge Funds, Japanese Funds, Domestic SIP's, Insurance Companies and also to a large extent Indian Investors. This has resulted in dramatic value creation. This has led to a far better than expected surplus of funds for disposal at the hands of Indian Public, NRIs' and Corporations. This surplus has conveiniently found its' way into Real Estate. The presence of this surplus is confirmed strongly by the falling interest rates to ridiculously low levels like 7.0%-7.5% 1.1

2. Indian Developers discovering the London Alternative Investment Market 1.2: Were you left wondering how on earth are developers able to command such high price? The answer cannot be simpler than this, "they source money way too cheap". Imagine a typical builder, he'd have to sell atleast a good part of his project before contemplating entering the market to buy extra TDR. However a smart builder sources funds from Londons' AIM, and then is able to sell ready-made flats in an almost "Auction House" model. They modus-operandi is quite easy actually, there exist a healthy nexus between property developers and estate agents, and its' not so difficult to find "investors" in a market of high capital availability. So you keep doing cross-selling till such time that prices are sky-high and at the same time they are generally accepted to be the real price. Although there is no citation for this, it stems from my personal account of being offered "investor" flats by the builders. These investors are nothing short than speculators who eventually pull up the price of a project, provided the developer can take it to completion by himself (with little support ofcourse).

3. Huge demand: Some basics dont change, there is no denying the fact that there is demand, but to say that this demand was generated in the last 30 months is foolish! This demand has certainly being recognised in that period but I wonder if its' actually being catered to! The demand is the underlying guarantee that prices will shoot-up and is also being used by investors to stay put in their investments.

4. Allowance of FDI in Reality: This has been one of the most disastrous decisions taken by UPA government, in March 2005. The effects of this are being felt more severly than ever! How can a government where communist parties are stakeholders make such a blunder? To deprive the common (even a middle-class common man) of the right to a good quality housing is the best way to be voted out of power for the current government. The hard work ahead for the opposition is to spread the word, and take this colossal mistake to the general public.

5. Corruption, Corruption and More Corruption: This is the primary source of black money, and this black money is the fuel for Real Estate! An actress who dates a businessman-scion of Raj-era goes on air proclaiming that she only invests in "Real Estate". A wee-bit of enquiries into the same would show the world what an "Heroine" is really made up of!

References & Links:
1.3: Click here for the latest on Mumbai's Real Estate Bubble
1.4: Compare your understanding of the Mumbai Real Estate to the following wiki article.