Economics and Whispers collide!

A lot happens by word of mouth in India. Real estate prices being one of them. A market that is totally controlled by touts and brokers. “Sir rates to double ho gaya!”. And they have taken prices not only beyond the ordinary Indian but beyond the ordinary American or European as well. I did a quick search on Magicbricks on residential properties in Mumbai which are more than a mere Rs. 5 crores in price. I got all of 79 pages of property listings. And this was substantially more than what I got for a search between Rs. 60 lacs and Rs. 1 crore. 

The fact that there is a substantial market at levels like these, and is being sustained, makes you question the most important choices you have made in your lifetime. (You mostly question your qualifications!) 

Haha, I happened to watch a program on Discovery Travel and Living. This was a program on high flying agents in Hollywood. They were the people who were looking for houses for Bill Gates, Madonna, Tom Cruise and the like. Now I was amazed to find some of the bargains on offer. (1 Million USD is roughly equal to 4 crores of Indian rupees) For as low as $ 5 – 6 Million you can get a 5 bedroom house with a Olympic size swimming pool and tennis court in Hollywood! And the agent will happily throw in John Travolta as your neighbor, all a part of the deal. You can even have barbeques with him. Cool. I did some slow mental maths. 25 crores, in Mumbai, maybe this guy could get a 2 bedroom apartment overlooking a dilapidated garden in Malabar Hills, with running water for 4 hours per day. The costliest houses in Hollywood were in the range of $15-20 Million USD. (Rs 60 Crores) The per-square-feet rates in Hollywood were slightly more than what they are in nondescript Chembur. Hollywood was getting close. Not yet Bollywood though. 

So our brokers have happily taken the wormhole to the next galaxy in prices. And all of this was done through an efficient network of brokers on mobile phones. “Sir rates to double ho gaya!”. We know the whisper-system works. Demand-supply is balderdash?