Real estate bubble building up again in Mumbai

Mumbai: Mumbai’s real estate prices have begun to run amok once again, suggesting that another realty bubble is in the making. In a quick reversal from last year’s recessionary trends, residential property prices which had dropped by almost 35% in some areas have risen sharply in the last nine months and are now close to their earlier peaks of 2007-08.

The rise has been sudden both at the premium end of the market and the deep suburbs, suggesting the return of speculators and investors to the property market.

A three bedroom-hall-kitchen (BHK) apartment at upmarket Warden Road was recently sold at Rs93,000 a sq ft (built up rate) when it was quoting at just Rs 50,000 in early 2009. Apartments (mostly owned by investors) in Beaumonde, a building by Sheth Developers at Prabhadevi, are now quoted at approximately Rs50,000 a sq ft as against Rs35,000 and above in 2008. Apartments at Planet Godrej, developed by Godrej Properties at Mahalaxmi, are being quoted at approximately Rs27,000 a sq ft, close to the peak rate of Rs30,000 a sq ft quoted in 2008. Prices in 2008-2009 had dropped to almost Rs16,000 a sq ft.

Raheja Vivaria at Mahalaxmi is now quoted at Rs26,000 a sq ft, close to its high of Rs30,000 a sq ft in 2008. It had dropped to Rs16,000 a sq ft at the trough earlier in 2009. Similar was the case with Ashoka Towers at Lalbaug which is now quoting Rs 25,000 a sq ft. Prices at Cuffe Parade, Nariman Point and Altamount Road, which had dropped to almostRs40,000 a sq ft, are back to their earlier rates between Rs50,000 and Rs70,000

How not to mismange growth

Colors TV channel started a comedy show called Comedy Nights with Kapil. The show, which followed other comedy shows on Star Plus and Sony went on to become a hit.
Quite obviously, Colors must have hiked the advertisement rates for the show as it gained in popularity.

But it got upset when Kapil and his team started asking for more money. But guys, you too were asking from more money from your advertisers! How does that make you any different than Kapil.

To spite its face, Colors cut its own nose and launched a rival show to the popular show rather than being magnanimous in increasing the payment to Kapil & Co.

And that left Kapil & Co. no option to terminate the show. This show made a lot of people famous and rich. Including the channel.

This is a corporate lesson in how to mismanage growth. The channel could have very easily drafted a growth clause into the agreement with the production house and agreed to increase payment based on TRP and other factors. But it must have been greedy to take all the money home. After all, they must have reasoned that it was their property.

Now, they have thrown out the baby along with the bath water. The replacement show is nowhere close to what Kapil & Co. were dishing out as a team.

Like KBC was never the same without Amitabh.

The lesson to be learned is that when drafting agreements, care should be taken to factor in all eventualities and they should always be drafted with the end in mind. Had the legal agreement factored in growth in revenue and sharing formula, it would have been a win-win situation.

First dent in the evil empire of Chaggan Bhujbal.

In 15 years Chaggan Bhujbal built an empire worth 10,000 Crores (at the very minimum) auctioning police posts while being the Home Minister, selling contracts while being the PWD minister.

No one raised a finger on him. Finally the chickens have come home to roost as his infamous nephew who ran a parallel home department from his official bungalow Ramtek was arrested.
At least in this arrest, Devendra Fadnavis is more honest in going after the corrupt than our eminent Narendra Damodardas Modi. At least he has shown some spine.

Although BJP/Congress/Sena/MNS, the parties that have mismanaged Maharashtra are all hand in glove with each other, his action still shows that there is a small glimmer of hope. Now when Chaggan Bhujbal return, he too should be arrested and sent to prison. I am sure there will be enough disgruntled policemen who would like to beat the shit out of him.

Why India's home prices will crash?

By
Ritesh Kumar Singh
Corporate Economist, OPED Columnist & Keynote Speaker

In a recent media interaction, Finance Minister Arun Jaitley urged RBI to reduce interest rate, as lower interest rate will fuel growth in India's realty sector which is suffering from severe #DemandSlowdown#. He's not wrong. There are 750,000 unsold apartments in 7 cities alone including those in Mumbai, NCR/Delhi and Bangalore.  RBI Governor Dr. Raghuram Rajan obliged FM by a 50 basis point rate cut. Will that be enough to revive housing demand? Will it save the realty sector from #crashing#? Why India's housing sector is looking at imminent crash?

Read rest of the article here

OK, so we have been had...

May 2014 saw BJP coming to power on the back of massive spending from industrial houses and installed one of the most controversial persons as the Prime Minister of India. 31% of the voters choose BJP and due to fractured opposition and the ruling party reeling from corruption charges saw BJP ascend to power.

Even though many sane voices spoke of the danger of BJP coming to power and the divisive persona of the Prime Minister candidate, voters were still swayed by huge promises of bringing back black money and of better days, progress for everyone and an end to corruption. Promises that don't seem to have come true till date although a lot of water has flown under the bridge.

What has indeed happened is that the worst fears of the wise ones, that of the country being divided on the basis of religion are indeed coming true.

Much as we fight this madness on a daily basis, through posts on social media sites such as Facebook, et all, the fact is that we have been literally had.

This madness occupies our mind space and raises our temperatures. Many amongst us still do not see the danger of a polarized society. People who celebrated till some time back unity in diversity suddenly seem to want the whole cake to themselves. They are not bothered about the feelings of others and want to bring them back into their own fold.

What we now need to do is to free ourselves from this madness and finds ways and means of taking the country forward. The way things are going, we don't seem to be making any progress. It is sheer good luck that oil prices have fallen globally, yet the rupee is becoming weaker by the day and if the present theatrics continue not many foreign countries would be interested in investing in India.

We need to reverse this trend. How we do it is the big question.

Exposing the current regime is a good start but we need to do more. We need to raise the awareness level of the common public as the media has abrogated its role in exchange of pecuniary benefits.

And this awareness has to be raised sans any political patronage because the moment you associate any political party with the message, people tend to feel that it is just propaganda.

We need to keep our political views aside and work systematically to save the cultural fabric of our nation otherwise we will have no answers to our coming generation which will most definitely question our silence.

An agenda for Bombay

Bombay has a population of 12.5 Million people. About 60% of the population lives in slums. Real estate prices range between an absurd 3,00,000 per square feet to 12,000 per square feet making it impossible for most to buy a house in the city. Builder, Politician and Landowners nexus makes land scarce. Add to this rule and regulations that strangle utilization of land through Floor Space Index Rules and you have the perfect recipe for daily struggle for most of the residents.

Bombay requires a complete rethink. Not only Bombay for that matter most cities need a complete rethink.

Every day millions move from their homes to work places using public and private transport and most travel in sub-human conditions often spending up to four hours every day in a wasteful commute.

Yet, transport service providers are running in a loss.




The solution to the problem lies is rationalizing the city and making public transport so strong that people do not use personal vehicles.
How can this be done?

The only solution that will work is to make the city go vertical. For this we need suitable amendment in the FSI rule. We need to do away with the rule completely.

Areas near railway stations should be cleared to expand the railway system into an 8 track system from the present 4 track at most places. All platforms should be double discharge and there should be no vending allowed on stations. All stations should have elevated bus and public transport stands such as people can use these facilities to quickly move out of the station into the waiting transport. They should not spill onto the roads.

Offices should be located not more than two kilometers from any station and therefore within walking distance. Covered walkways should be provided from stations to office complexes. It would be best if the office complexes were located on the railway station itself thus eliminating the need for people to travel using any public transport.

Every building should be of at least 40 floors with refuge floors every 7^th floor. This will lead to accommodation of 288apartments if the building was to have 2 wings with 4 apartments per wing. This will move about 288 families into one tall building. Each flat should be a standard apartment of 1000 square feet and consist of 3 Bed Rooms, a Living Room and a Kitchen. Standardizing the apartment will allow for factory made doors and windows and reduce time taken for constructing the building. Such a building will occupy about 12000 Square feet of ground space. Even if one such building came up on 1 Acre of land, we will need about 9000 acres of land to house the current population. And we have much more than this available, in fact we have 600 times this land mass available.

These houses can be sold for around 4000 rupees per square feet giving a profit of about 2000 rupees per square feet to the builder, a massive profit one would say. A house anywhere in the city will thus cost40,00,000. An affordable figure.

All the available land should be acquired by the state for the good of the people.

As people get concentrated near railway stations, the far off areas of the city can be returned to nature and be converted into forests and parks for the benefit of the residents.

Markets can also be made vertical with a few buildings serving the purpose of the community rather than malls which are energy inefficient and eventually cost the consumer.

Can this be done? Yes. Will it be done? Maybe, if we are able to rise above personal greed and personal gain. We can create a city that redefines the way we live.

The importance of non-violence in protests...

Remember reading this somewhere, something to this effect.

"The state will provoke and create conditions where you become violent, this is something they can handle, they have laws and machinery to put you in the place where they want you. It is non-violence that they don't know to handle. What can you do to a person or group of persons who sing songs, hold candle light vigils, silently march through neighborhoods. Nothing. That is where the state does not know what to do and how to handle such protests.

This is the only way to beat the state at its own game"

http://teachingamericanhistory.org/library/document/the-power-of-non-violence/