I have been writing after a long time… Good to write after intermittent timeframe then on a regular basis without any significant updates. :-)
I wanted to write about my Diwali vacations in my home town, my learning from this visit and how Ireland’s economy debacle is quite similar to a potential brewing problem within India. Strange, but true… read this further.
I was spending a full week in the town almost after 3 years so got an opportunity and lots of free time to meet many friends, relatives, everyone… My hometown is famous for all tasty Indian snacks and everyone there gives a nice treat to someone who is in the town. They won’t take you to any tourist place/ museum/ historical places etc. but to typical Indian food bazaars/ food-malls during such visits. But this time a different experience was waiting for me.
Everyone I met there, and with no exception, has not talked about me/my well being as much as they talked about the hot property in and around the city. They have talked about how the rates have gone up in last 3 years, which are the hot places to visit. In fact, it was to this extent that I made visits to at least 3 such ‘hot property’ destinations in the city which have already gone up by 4-5 times in last 3 years, and some cases more than that, and still people were talking about more appreciations for such locations. It was not limited to this extent but when I was using public transport to commute/ while I was at a paan-shop, I found that people there also were talking about property/ land/ flat etc… This was craziness…
The city is a trading place and has two main industrial belts near the city where all the leading companies are present. It is also fast emerging as an education hub with the presence of IIT, IIM and hundreds of colleges which are offering engineering and management qualification to anyone who is willing to grab that. The result is a big boom in the services associated with such market. The people are very industries and have captured this education market opportunity with open hands and now the city has many hostels (from 5-start facilities to road side place)/restaurants/ food-mess etc running in and around the city.
When I met people in the city, I found that they are busy in acquiring plots, vacant land, houses, flats everything more than they need or they have the capacity to hold or buy. The problem is huge appreciation in prices and people’s expectations for further crazy appreciation in a city which is limited to education hub and 2 industrial belts.
But is this the story confined to my home town only? Is it not prevalent across the India – almost the same story only the situations are marginally changed here & there. You visit anywhere in the country, a small city to a metro, it is the same. I have taken the example of my home town since I wanted to write about the craziness for property in India for sometime but wanted to avoid getting myself biased. After visiting my home town, I have got this confirmation that we are now brewing the problem.
It gives me a jittery feeling, especially when I read that the problems in Ireland (a small European country which is heading for bankruptcy) is due to such property bubble. We have seen earlier how US has got entangled with sub prime. We are also hearing the same property bubble getting built up in China. When I quote such examples, people have easy way of telling me that US was different, India is different and Indian market is more demand driven and not investor driven, the banks are not landing easy money to people etc. But if that’s not the case then how come people are acquiring so fast and so easily esp. more than what they need? If it bursts then what will happen? US is saved because they can afford such mistakes, possibly Ireland can afford with the help of European Union but who will come for our rescue? The answer is simple… no one. I see this as a potential problem but many may differ. My heart says that it should not lead to a problem but my mind disagrees. Let’s see who wins. Till then goodbye.
As always you are most welcome to share your thoughts/opinions/criticism/praise etc…:-)