The fact that the economy of the world, as of India has slowed down is something that has been hitting our ears with varying intensities over the last year. At times, it has been a whisper, while at others someone shouting down our throats, but the effective truth has taken hold on all of us, and the economy, we are in consensus, is doomed for quite some time to come.
It is in times like these when unemployment is at the highest and spending power at its lowest, that things start crumbling. And when I say things, it should logically include every facet, be it the much-in-news financial services, or the still not obvious retail. The reality however is different. There is no restaurant in town which is not filled to its capacity on weekends, no superstore worth its salt which does not see huge footfalls even on weekdays after office hours.
Whether all these footfalls and all these people at eateries contribute to the actual growth of the economy is a big question. The answer, to me, is pretty obvious...a big NO. Had it been really effective, we wouldn't have put the lids on the consumption story of India, or would we? This answer to this is not so obvious because the economy's dependence on consumption, especially the visible economy's (stock market, real estate prices, inflation) dependence on consumption is not as straight forward as it seems.
The impact of factors not really related to the domestic market and its consumption is far more than what we would like to give credence to. Consumption in the advanced economies, we all know, is not even a spot on its previous self and more than that, there are far bigger problems than a slow down in consumption that are plaguing these economies. The world, to add to it all, has shrunk in such a big way that all these problems of the global greats are taking their toll on the so called pygmies who were just beginning to show their real size but have been thwarted in their tracks.
All this has been going through my mind as I have, taking a contrarian call, been looking for a 2 bedroom place to buy in this teeming metropolis. With the kind of rent I pay every month, and the softer interest rates in force, I thought that it will make supreme sense to capitalize on the cash-strapped distress of the Mumbai builders and developers. Hoping to make a killing out of the real estate scenario which everyone has been talking about with a frown on their faces, I started looking out.
Beginning with passive enquiries with friends who have already taken flats (even while the going was good and prices were high) and slowly transforming into active chats with brokers, I have been busy for the last few weekends. Ravi and Deepti have helped immensely, Rohit and Kanav have been making the right noises about going for bulk deals and Himadri has pitched in with his relatively well-off contacts with experiences of their own.
For people familiar with this mad city that Mumbai is, I have, since January this year, explored the central sub-urban areas of Chembur and Wadala, as well as the Western suburbs of Andheri, Jogeshwari, and Goregaon. And this was when I realized the folly of it all. The bloody pirates are still holding on and it is not just illogical, it is silly, even comical…nay hilarious.
I have realized that the best of deals that I have looked at put the floor of my investments at a staggering 70 lacs (for a moment, forget the black component for the sake of convenience) for a 2 bedroom-hall-kitchen house with a carpet area close to 700-750 sq ft. Lest you have forgotten, I am talking about the central and western suburbs, not even Bandra, right before which Mumbai town ends. A distress deal puts the value of 1100 sq ft of space at Jogeshwari-Vikhroli Link Road (not a very prominent location) at an all inclusive tag of 88 lacs. Can you imagine the effrontery of it all?
Posted at 04:03 pm by Nitai