Roof in Mumbai?? Too expensive!!!

The search for housing in mumbai is a pain. That too in spite of sites such as magic bricks which are supposed to help find a rented accommodation easy. I went to the same apartment block that I rented out 3 years ago and it now costs 14,000, an increase of 100% in three years. There can be multiple reasons for this.

1. There is a seasonal shortage of houses which has resulted in demand-supply mismatch. For example, its quite possible that December-march period there is an abundance of houses available to be leased out but not enough people wanting to take up the lease. In the period between May-August, most graduates are stepping out of college and have started looking for house. At this time, its quite probable that there is a shortage of housing. The evidence supporting this fact is that housing has turned to be 30% more expensive in the past 3-4 months.

2. There is a housing bubble in the making here. A 2 BHK near fantasy land costs 1 crore which is 250,000 USD. Apartments in Brooklyn start from 200,000 USD. Moreover in Andheri east, there is neither a mall and only one screen to watch a movie. And in no way, can New York prices can be compared with India. No MBA grad in NY would be paid 1,100 USD for a month!!!

3. Excess liquidity. This term keeps cropping up these days on news channels and papers. What it means is there is lots of money with the people and failing to find investment avenues has resulted in investments with lower returns. So for lower returns, as the future price is assumed to be fixed, will result in higher current prices. Though it seems intuitive, I seriously doubt whether excess liquidity alone would increase prices to such an extent.

4. There is a genuine shortage of housing in Mumbai. Mumbai has around 2 Crores(20 million) in an area of 400 square kms. Assuming a unit size of 4 per family and only 50 sq Kms available for housing, it works out to be 100 sq meters(1076 sqft) of land for a family of 4. By the way, in Mumbai, you would 2 BHKs with 1000 Sqft. Which might be too less if we consider only flat housing. But fortunately we can built multi-storeyed buildings.

5. The expected present value of future cash flows demands such a price. This assumption is easy to justify. Any discounted cash flow(DCF) analysis uses a lot of assumptions and if we take rent as an indicator of future cash flows, it would justify the current prices.
For example, a property that gives out rent of 24,000 per month would give out 28,800 per year. Assuming 20% tax rate with expense of 60,000 per annum for society charges, water, maintainece etc and a discount rate of 11% post tax, would give the value of the apartment to be 1.1 crs. But the rent is based on the price of the property. This serves nothing but as a self serving device!!!

Just for argument sake, if I buy 1 crore flat using a bank loan for a period of 20 years, the EMI would work out to be 80,000!!!

p.s:I still have to call up a bank and find out how much is the EMI.

One more day at work

The more I work, the more I hate what I am doing. I get this sinking sensation that all that I have learnt is of no use in the kind of work that I am being made to do. Moreover, I do not work for more than 3 hrs a day. And that’s enough for me to despite the kind of work I am being made to do by this fine firm. For a fact, the work I do is more aligned to an IT firm rather than a finance firm. No wonder, some smart ass registered this firm as an ITES firm.

Anyways, it’s great that the rains have stopped. This indeed is a moment of joy as the temperatures have reduced and everything looks green and bright outside. Alas, my stream of thoughts was interrupted when a branch fell of my head. Luckily, I did not suffer any serious injury. Post that, I just managed to wave to Pote as we crossed paths at Sher-e-punjab.

Things seem to have stopped or rather moving in the opposite direction on the personnel front. There is this looming threat of losing all the hair on my huge scalp. As it is, I seriously lack a personnel life and on top this, baldness!!! I am afraid that being bald will rule out any chances of a romantic encounter. Seriously, I am yet to come across any bald guy claiming that he has a girl friend. The closest was the bald guy in Seinfeld(George Gaztanza), the sad loser who gets jacked whenever he goes out on a date. But that guy at least had a date.

I think I have to do something of a continuous learning program so that I would be abreast with the latest happenings around us. I have already started dreaming of going to a gym, playing basketball in the weekends and a trek every month. Let’s see how many of these plans fructify.

The rains have started

Finally the rain god is showing us mercy. That was my thought when it started raining yesterday. It was only after I could not go to the theater to watch SIVAJI that I realisied that it was a boon but a curse. Sure the temperatures have gone down but mobility is severely restricted. I even planned to meet Anshu after 6 months this weekend. We should have some mechanism through which we can moderate the rainfall that falls on a particular day. Or have means which would make us oblivious of the rain.

Anyways, I am yet to find a roommate. This whole interview process for a nariman point position screwed up my plans. Now I have to adjust with someone who I know very little. Lets see how it works out to be.


The damm stupid camera is costing 5k to be serviced. Have decided to chuck that thing and get a new one. Man, no idea why the camera costs so much. It looks like the companies are trying to make out of servicing parts and other accessories. Nice strategy though it looks like I am on the wrong side of this strategy.

By the way, it looks like I am a float in this company. I get work when someone is leaving for a holiday or reporting sick. In fact, I was recently told that the company has exceeded head count. No idea why they hired me when they do not have any work for me. And it looks difficult to get through as I am weighted by two bloody years of IT work experience. This is really frustrating. Sometimes I think I should have done better during college.

And I am really missing playing basketball here. Hope to find some court soon. Cannot believe that there is no place to play in the entire Mumbai. Really hoping that the rain stops soon.

First week in Mumbai

Mumbai is not kind on new comers. First, it’s the filled to the brim and over flowing local trains. A journey in these local trains will generally generate a desire among the first timers to get medical assistance for asphyxiation. And if anyone dare enter a Virar local to get off at Andheri, he/she are sure in for a long ride.

Then there is the whole question of getting a roof over your head. This task is not so easy as it seems. First, there are the exorbitant hotel rates. Yours truly has spent 3300 ruppees for 2 nights stay. Second, the endless search for a house on rent. There are various factors to consider here. The building, society, whether there are any shops nearby, transportation to office etc. Third, you come across a tribe known as the brokers. Somehow, the broker always seems to be earning your month's package in a half a days work. That too, tax free. As for me, it took 4 days of painful walks on this damm shoes to find a place to stay before my company put me in a limbo where I would be located.

Thankfully, I got a good friend of mine to mooch off on. I am presently living at his company's provided accommodation. The daily train journeys have turned less painful as I now proudly possess a first class pass and travel at 8 AM in the morning, a good one hour before the office time.

Today, it was actually a fun day. There was supposed to be training at Nariman Point at 10 Am but luckily it turned out be a 1 hour training instead of 6 and guess what, I took the rest of the day off. Watched the Ocean 13 movie and had lunch at Churchgate. The movie is quite good. It’s well edited with enough funny moments and at no point do you feel that the movie is dragging.