The fading bungalow at 38 Amrita Shergil Marg does not
immediately shout real estate bling. There is no tennis court, no
infinity pool, no Sub-Zero refrigerator or walk-in closet. The paint is
chipped, the bathrooms are musty and the ceilings have water stains. The
house may ultimately be torn down.
Yet when it went up for public auction, the winning bid was almost 156 crore rupees. And many neighbours consider that a bargain. One block away, a gracious if not quite Rockefeller-ready residence once leased by the Mexican ambassador is now reportedly on the market for more than 540 crore rupees. Other nearby houses are going for 216 crore to 378 crore rupees.
“The price of the Mexican residence is 594 crores,” said Jorge Roza de Oliveira, Portugal’s ambassador to India. “You can buy a home in New York and Miami and Lisbon and London and keep a lot of change for that much.”
Real estate prices in the heart of New Delhi, especially for the bungalows built nearly a century ago during the British Raj, are among the highest in the world.
Though India’s economy has cooled, the demand for property in elite areas remains so strong that even finding a house for sale is tricky: Formal listings do not exist; prices usually circulate by word-of-mouth. Transactions often require some “black” money, or stacks of cash paid under the table to avoid taxes.
Trophy property
The buyers are often Indian industrialists looking for a trophy property, a real estate Rolex. Or, real estate agents and sellers say, they can be politicians or their proxies, who often pay with trunks of cash.
For their money, buyers get a lovely piece of land and a piece of history, if not much in the way of amenities. Many houses require a major overhaul. Services, if far better in these elite areas, are still inadequate: Drinking the tap water is not advised, and power failures remain an irritant. The obvious question about the prices, in a country where hundreds of millions of people still live on less than Rs 100 a day, is: Why?
To a large degree, India is experiencing the sort of real estate boom common to big, emerging economies. When Japan’s economy was soaring in the 1980s, prices in Tokyo were so frothy that the 845-acre compound of the Imperial Palace was valued at more than all the real estate in California.
But the spike in New Delhi is also being fueled by ego, status and some unique distortions in India’s economy. Few properties come available in the leafiest, most prestigious section of the capital, known as Lutyens’ Delhi, because the area is mostly dedicated to government housing. Powerful government ministers live in British-era bungalows with stately lawns of several acres, while lesser officials are eligible for different categories of government housing in an oasis largely separated from the rest of the chaotic capital, where many people live crowded into slums or shanties.
“This is the best part of Delhi, the core of Delhi,” said Munish Kumar Garg, who oversees the allocation of government housing. “If these properties in Lutyens’ Delhi were put on sale, there would be a queue two kilometres long.” Power in Delhi can be measured by where a politician lives. The Directorate of Estates divides properties into eight categories, with Category 8 bungalows, the most exclusive, reserved for ministers and other top leaders. Former prime ministers and Presidents, and their spouses, are allowed to remain in Category 8 housing until death.
Given the shortage of such housing, the recent death of former Prime Minister Inder Kumar Gujral has spurred jockeying over who will get the bungalow. Navin Chawla, who was India’s chief election commissioner from 2005 to 2010, lived with his wife in a Category 8 bungalow on six acres, with accommodation for 17 servants, including a separate house most likely worth crores of rupees. When his term ended, so did his tenancy.
“I have to tell you, these homes are very timeless,” he said, sounding wistful. “It’s a bonus of the job to get a six-acre property for five years, one of the few bonuses of being election commissioner, I can tell you.” The wild prices have also affected the rental market. For decades, owners happily rented to ambassadors or diplomatic missions. Now, rents have jumped so sharply that some ambassadors are moving. Oliveira, the Portuguese ambassador, recently relocated after his rent soared. Mexican ambassadors had lived at 13 Prithviraj Road – the house priced at 594 crores – for a half-century, with the original lease signed by Octavio Paz, the Nobel Prize-winning writer and poet who was Mexico’s ambassador in the 1960s.
Yet when it went up for public auction, the winning bid was almost 156 crore rupees. And many neighbours consider that a bargain. One block away, a gracious if not quite Rockefeller-ready residence once leased by the Mexican ambassador is now reportedly on the market for more than 540 crore rupees. Other nearby houses are going for 216 crore to 378 crore rupees.
“The price of the Mexican residence is 594 crores,” said Jorge Roza de Oliveira, Portugal’s ambassador to India. “You can buy a home in New York and Miami and Lisbon and London and keep a lot of change for that much.”
Real estate prices in the heart of New Delhi, especially for the bungalows built nearly a century ago during the British Raj, are among the highest in the world.
Though India’s economy has cooled, the demand for property in elite areas remains so strong that even finding a house for sale is tricky: Formal listings do not exist; prices usually circulate by word-of-mouth. Transactions often require some “black” money, or stacks of cash paid under the table to avoid taxes.
Trophy property
The buyers are often Indian industrialists looking for a trophy property, a real estate Rolex. Or, real estate agents and sellers say, they can be politicians or their proxies, who often pay with trunks of cash.
For their money, buyers get a lovely piece of land and a piece of history, if not much in the way of amenities. Many houses require a major overhaul. Services, if far better in these elite areas, are still inadequate: Drinking the tap water is not advised, and power failures remain an irritant. The obvious question about the prices, in a country where hundreds of millions of people still live on less than Rs 100 a day, is: Why?
To a large degree, India is experiencing the sort of real estate boom common to big, emerging economies. When Japan’s economy was soaring in the 1980s, prices in Tokyo were so frothy that the 845-acre compound of the Imperial Palace was valued at more than all the real estate in California.
But the spike in New Delhi is also being fueled by ego, status and some unique distortions in India’s economy. Few properties come available in the leafiest, most prestigious section of the capital, known as Lutyens’ Delhi, because the area is mostly dedicated to government housing. Powerful government ministers live in British-era bungalows with stately lawns of several acres, while lesser officials are eligible for different categories of government housing in an oasis largely separated from the rest of the chaotic capital, where many people live crowded into slums or shanties.
“This is the best part of Delhi, the core of Delhi,” said Munish Kumar Garg, who oversees the allocation of government housing. “If these properties in Lutyens’ Delhi were put on sale, there would be a queue two kilometres long.” Power in Delhi can be measured by where a politician lives. The Directorate of Estates divides properties into eight categories, with Category 8 bungalows, the most exclusive, reserved for ministers and other top leaders. Former prime ministers and Presidents, and their spouses, are allowed to remain in Category 8 housing until death.
Given the shortage of such housing, the recent death of former Prime Minister Inder Kumar Gujral has spurred jockeying over who will get the bungalow. Navin Chawla, who was India’s chief election commissioner from 2005 to 2010, lived with his wife in a Category 8 bungalow on six acres, with accommodation for 17 servants, including a separate house most likely worth crores of rupees. When his term ended, so did his tenancy.
“I have to tell you, these homes are very timeless,” he said, sounding wistful. “It’s a bonus of the job to get a six-acre property for five years, one of the few bonuses of being election commissioner, I can tell you.” The wild prices have also affected the rental market. For decades, owners happily rented to ambassadors or diplomatic missions. Now, rents have jumped so sharply that some ambassadors are moving. Oliveira, the Portuguese ambassador, recently relocated after his rent soared. Mexican ambassadors had lived at 13 Prithviraj Road – the house priced at 594 crores – for a half-century, with the original lease signed by Octavio Paz, the Nobel Prize-winning writer and poet who was Mexico’s ambassador in the 1960s.
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