From the crooked timber of humanity, no straight thing was ever made. – Immanuel Kant

Mumbai has the most dysfunctional real estate market in the world. Here we see the crooked timber of humanity - as Kant put it - in all its terrible glory. Originally built for six lakh people, it now houses 18 million. That’s almost the population of the continent of Australia. All cramped into a few square miles of island surrounded by the sea.

There are over 130,000 apartments in inventory. At an average of a thousand square feet per unit, - and priced at even a conservative Rs 20,000 per square foot, - that’s over Rs 250,000 crore of unsold inventory. That’s almost 3 percent of India’s GDP. Yet prices keep rising - defying every law of common sense - let alone economics. And this is just residential property we’re talking about, not commercial.

Karma is destiny, but in Mumbai, property is destiny.

Here you will see it all, if you have the stomach for it. The real estate industry is a giant blood sucking vampire squid on the face of the city. For most, it is a Darwinian struggle for existence, a struggle for a few square metres a man can call his own, and where he can rest his tired head at night. Real estate dominates life in this city like in no other in the world.

So many actors that the vampire squid has its tentacles on. All strutting and fretting their brief hour on the stage.

The developers, the bureaucrats, the municipality, the politicians, the landlords, the banks, the lawyers, the real estate agents, the tenants, the financiers, the social activists, the courts, the brokerages, the constructors, the conmen, the media, the police, the society officers, the architects, the surveyors, the buyers, the public.

And behind it all, countless untold human stories of hope and greed and arrogance and compassion and aspiration and right and desperation and practicality and appearances and luck and calculation and stupidity and wealth and wrong and everything.

Where are you, gentle reader, in this vast human drama? Find yourself below in some of these true stories.

“Where do you live?”

There is the executive buying an unaffordable flat who overborrows on his home loan and bets that he will get the promotions and raises that make it affordable, the bankers who ensure the executive is signing away his provident fund in the fine print as security for the home loan,….

…the housing finance companies with their selective data piously bleating about how “affordable” property is becoming, the no-nonsense researcher who points out that it takes over 200 years of India’s per capita income to buy a flat in Mumbai - as opposed to four years in almost every other country.

…the social X-rays in their Pradas who manage to get in that quintessential Mumbai question “Where do you live” in the first three minutes of conversation, unmarried 80-year-olds who presell their property for millions and then are afraid the buyer has a vested interest in their early death - as they are not obliging the buyer by dying early, young reporters breathlessly reporting the latest property sold for X million dollars, media channels that carry real estate propaganda programmes on prime time in exchange for property.

Adarsh redux

There is the doctor who gives up his Nepean Sea Road apartment to his wife in a divorce settlement and moves to Borivali with the woman he loves - and never regrets it, the private equity guy who makes a big show of moving to Mumbai from London and then changes his mind because even on his fat salary it’s not worth it, the chartered accountant who sells his flat and waits to buy another - “because property prices will fall as they are too high”- only to discover that prices go even higher,….

…only sons whose value in the marriage market goes up immeasurably because they inherit property, calculating young girls marrying those only sons, the smugly married couples that result from those pairings.

…the reporter who has in her hands the material for another Adarsh-type scandal, the editor who inexplicably spikes the reporter’s story and doesn’t allow it to be published, the real estate companies defaulting on their debt but still paying for fabulous glossy full page ads costing Rs 25 lakh each, the newspapers who publish the fabulous glossy full page ads - without charge - in return for ownership claims on property.

“So you are only a tenant”

Then there is the wealthy widow who - after making a real estate fortune in Florida - returns to Mumbai to do the same and finds her magic touch still intact, the noted architect with no aesthetic sense who acquires a reputation because he can manipulate the world’s most corrupt and convoluted building rules on “floor space index”, the speculators who call themselves “investors” and talk with a straight face about doubling their money every four years….

….the society member who says - “So you are only a tenant” - when introduced to the new occupant in Apartment 34, the patriarch who says that he would prefer that his grand-daughter marry a man without a property rather than a property without a man, the family of five in the Chowpatty 1 BHK who go for long walks on Marine Drive so that the recently married son can make out with his wife.

Roti, kapda aur …. ?

There are the ghadas who become eligible bachelors because there is a spare bedroom in the flat, people staying on in dead-end jobs because it comes with accommodation, the hapless tenant caught in the middle of a fight between multiple ownership claims by various landlords,….

…. residents who knowingly buy into property with dubious title because they have no choice, developers who knowingly sell the residents the property with dubious title knowing that the discount is sufficient to tempt them, the developer who postpones a deal to buy his beloved race horses because the price of his stock has fallen 99 percent.

There are old families living in flats worth millions but paying rents that are less than a taxi fare, lawyers who throw a cloud of legality around a property grab and then argue in court over technicalities, strategic minded families marrying their daughters into property, the khadi wearing activist who says roti kapda makaan is a basic human right - and that Mumbai’s property market is a violation of his basic human rights as there is no makaan, …. the crook who violates the biblical tenet of not bearing false testimony against anyone - by launching false police complaints of extortion against another in a property dispute.

…divorcees staying on in the same matchbox sized flats with hated husbands because their lawyers tell them to, the servant asking the guest visiting the up market home - “Where do you live?”, the bechara analysts with the brokerages trying to explain how real estate prices can go to the moon but the stocks of the companies owning real estate can go south to Australia.

Fully furnished

There is the wealthy businessman who goes to his broker asking him to take a punt in the stock market to make up the shortfall so he can buy a flat for his children, the broker who takes the punt and loses it all….

…. the government employee who is five years from retirement – and loss of government accommodation – who suddenly turns corrupt because he has to buy property to settle in Mumbai, crooked government bureaucrats dealing in distressed property with unclear ownership who rent them out on the side.

The phoren-returned executive sure of the nest-egg he has built up who “finds it all too expensive” and waits only to find himself priced out of the market, the young couple looking to rent with the “aspirational” look on their faces being shown around by the broker on a Sunday morning, the broker deciding whether he can pass off the flat with just two dusty old sofas as “fully furnished”…

…the global property brokers with big companies who solemnly swear that prices which double every four years will keep doubling at that rate till the end of time, the owner who shows off his flat to potential buyers every year to get a feel for the market price and then keeps it locked up, the potential buyers with the guarded hope in their eyes who come to see the flat, the broker who promises a greedy landlord a 30 per cent higher rent with a new tenant, the greedy landlord whose flat is vacant for a year as there are no takers at that higher rent.

The estranged daughter of the real estate tycoon who is paying the fancy lawyers of the NGO that is fighting against her own brother’s project, the foreign investors who have invested in that project through London’s Alternate Investment Market (AIM) who see their shares going to zero.

The police spokesman who mentions that property closely follows love as the single biggest cause of murders in Mumbai.

Let it all come

And so it goes. On and on. A million different stories all caught up in the Darwinian struggle for a few square metres of land.

All about property. All about real estate.

All destinies brought together, and bound together, by the most ruthless and rapacious real estate market in the world.

And through all the madness, that elusive “spirit” of Mumbai, whispering to them all, -

let it all come,

let the future come,

our dreams and us,

will grind it all to dust,

in the grist of our great turning mill.

Mother of God. Where will you see this crooked timber of humanity?

This is the subject of a Dickensian novel. Where is the Dickens to cover it in all its terrible glory and humanity ?

Source: The crooked timber of humanity: Mumbai's real estate market - Firstbiz

By: Adil Rustomjee is an investment advisor in Mumbai.
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  • Good one...

    It seems like Pune is also becoming like Mumbai RE market, with more speculators than actual end users. We are seeing matchbox sized flats these days. The same article may be reprinted by Replacing-All Mumbai with Pune.
  • Excellent article. Thanks for sharing :)
  • Very nice article emptypocket. :clap2:
  • nicely put
  • Pune is in same league. Every saturday's TOI property articles seem to try justifying the manipulated appreciation in Pune but property edition itself has gone thinner than a year back with crazy RE prices.
  • Originally Posted by NCRTalk
    Pune is in same league. Every saturday's TOI property articles seem to try justifying the manipulated appreciation in Pune but property edition itself has gone thinner than a year back with crazy RE prices.

    +1. This can be seen clearly from Pune's biggest RE advertising newspapers :- TOI & Sakaal.
    And the boards which used to placed on trees, laundry shop, flour mill etc. where they used to mention 'For Sale, 1 BHK, 2 BHK, 3 BHK'.... are also gone.

    A guy who works in an advertisement agency (who are also in outdoor advertisement) told me that their revenues from builders have shrank by about 57% YoY. The jewellery business is more or less constant but the biggest jump in revenues they got was from advertisement of FMCG products & packaged food industry & therefore they met their growth targets.
  • I read it again today after spending the day hunting and exploring. It hits you harder !