Fools build houses and wise men live in them”. My grandfather, who never tired of repeating this adage, was fervently opposed to owning property because he saw it as blocking too much money into something that would not yield a good return; it was better, he argued, to put it in the bank and receive interest. I can’t help but wonder what he would have thought about this today when the house that he lived in, and ironically did own, is approximately ten thousand times its value than it was in 1950.

The property boom in India is riding on one of its highest waves ever. A recent headline in The Times of India, one of India’s largest newspapers, informed that a house in Delhi’s Amrita Shergill Marg (think Park Avenue) was sold for 137 crore rupees, roughly thirty million dollars - and this is far from the highest bid to have made headlines off late. Today, Mumbai and Delhi are spoken about in the same breath as Tokyo and New York when it comes to real estate prices. A plush 3,500 square feet apartment in Mumbai’s coveted Cuff Parade area (think Upper East Side, New York) could cost you 24 crore rupees, about five million dollars, if you want things like a nice sea view and parking space for at least five cars. If only my grandfather had not sold his property, I’d be sipping Pina Coladas on an exotic beach and writing a travelogue!

The recently moneyed upper-middle class as well as rich NRI’s (Non Resident Indians) are investing huge chunks of their income into the market, which in turn is leading to a rise in prices and prompting still more people to invest. Stories about prices doubling in less than a year have only fuelled this craze, convincing many of this being a sure shot at making quick money. Housing loans, as a result, are being handed out like hot cakes to twenty and thirty-somethings who, in a certain segment of course, are being paid enough to take on such financing.

In Gurgaon – an IT hub near New-Delhi which hosts companies like Microsoft and GE and where there is a demand for high-class apartments for these employees- one could buy a modest apartment with all amenities (swimming pools, tennis courts, sprawling lawns etc), power and water back up (an important factor to consider in India) for something like a two hundred and fifty thousand dollars, or you could go for a luxurious penthouse overlooking the golf course – supposedly by invitation only- for about a million dollars.

Metropolitan cities like Delhi and Mumbai being saturated, the boom is now spreading to the smaller towns, or to far off suburbs – so far considered distant poor cousins – who now suddenly find themselves very much in demand for their apparent proximity to these cities. You drive onto a highway close to most prominent cities today and you’ll see huge complexes coming up where builders promise to construct Utopian localities with state-of-the-art homes. Their pamphlets are snazzy - showing soft focus, glitzy photographs of the interiors awash in warm yellow light, with merry children and affable housewives sauntering about blissfully. They often have names like ‘Emerald City’ or ‘Dream Towers’, and tell you all about the magical township and goading you to invest in the house of your dreams.

Malls and Multiplexes (one that houses both cinema halls and shopping complexes under one roof) are the other craze; they seem to be sprouting up on any piece of vacant land that becomes available. Asia’s largest mall, or so it has been claimed, is being built a stones throw away from where I live – an idea that somehow that does not excite me.
Commercial prices have seen a massive rise in the past year as well. In November 2006, a mere 1463 square feet of commercial land in Sector 18, Noida (another Delhi suburb) fetched a whopping two million dollars, at a rate of 1360 dollars a square foot.

Whether the property boom continues of not, one thing is not going to change and that is the mindset of this generation - take risks, invest wisely and live it up.
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  • House prices rapidly rising in key Indian cities


    Very well said, Sanmukh!
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