It is now obvious. No matter what some experts say, India’s realty market is in the grip of a dangerous bubble. In fact, it is prudent to remember that the many celebrated experts quickly lost their perspective when they start chasing any excessively hyped sector of the economy; and this time they are chasing a completely unregulated, black money infested market that is being touted as India’s hottest new wealth machine.

Surely there is enormous irony in the fact that foreign investors and realty brokers, operating out of swish hotels and offices are ramping up the prospects of India’s realty, even though their frequent visits to Delhi ought to enlighten them about the devastating consequences of decades of lawlessness that make it impossible to verify a clean title to property.

The story is more or less the same all over India whether in the metros or emerging boomtowns. Property registration and clear titles are a serious enough problem in Kolkata for HSBC to ask the West Bengal Chief Minister to introduce on-line property registration. Before that happens, the municipal corporation must stir itself to issue proper occupation certificates. Mumbai does have on-line property registration, yet, harried apartment owners in a suburb discovered (only after receiving demolition notices) that their flats, financed by leading mortgage institutions, were constructed on illegally occupied forestland.

The situation harks back to the IPOs (Initial Public Offering) and mega issues of the early 1990s and the absurd global dotcom bubble at the turn of the century. Investigations into the dotcom bust revealed that celebrated analysts of blue chip financial conglomerates had deliberately misled investors about valuations. Many were subsequently sacked, punished or imprisoned.

... contd.