Sunil Sethi: The rise of funny money

There are persistent rumours in Delhi that one reason why property prices have been shooting up in prime locations in recent months is builders, contractors and others associated with the Commonwealth Games (CWG) have to park their newly acquired and ill-gotten wealth somewhere. The stories have gained credence with a slew of media exposures concerning jiggery-pokery in high places, from wild over-invoicing of goods and services for the CWG to dodgy contracts and tenders at home and abroad; a few heads have rolled in the CWG administration but, for now, with the prime minister and many of the senior officials of the Union government intervening to monitor progress and quell a bad press, the idea is get the jamboree done with before a post-mortem throws up more dirt.

Is there a sudden spurt of cash sloshing about in the buying and selling of high-end properties and supporting lifestyles? If the evidence of eyes is to be believed, the wrecking ball in the shabby, old neighbourhoods of south Delhi has acquired a furious momentum in the last year. No whiff of the recent recession here. Modest one- and two-storey homes with small gardens, once the redoubt of upstanding army officers, retired civil servants, lawyers, journalists and solidly middle-class professionals are coming down like ninepins; going up in their place are four-storey deluxe condominiums with underground parking and basements, smooth stone-and-plate glass exteriors lined with imported appurtenances: German elevators, Malaysian hardwoods and Turkish marble floors.

At Rs 6-6.5 crore for 1,800 sq ft a pop, there is evidently no shortage of buyers. “Sir, yahan to aag lagi hai (Sir, prices here are on fire),” announced the chubby young broker in designer jeans when I went to inspect a friend’s conversion recently. Prices were up 25-35 per cent in the last 12 months, said the broker; his minion passed round trays of steaming takeaway cappuccinos as cell phones beeped and jangled, and he suavely assured me that takers were on tap.

Banishing the disturbing idea that the purchase of Rs 6-crore flats might be a few notches up from buying a round of cappuccinos, I looked at the ancient, dingy market bakery that, until not long ago, sold reasonable bread but revolting confectionery. It is now an unbelievable place, like the knocked-down old houses. Ambitious for his sons, the owner sent them to the Cordon Bleu school in Paris, and it is transformed into a stylish patisserie where women come and go talking, if not of Michelangelo, of handmade rum-and-mint chocolates, fresh baguettes and desserts of esoteric flavour and provenance. A couple of blocks away, a premium nature food store has opened where, to the blast of trance music, vast counters of cheeses, cold cuts and clingfilm-wrapped cabbages are on display. Glassy-eyed customers wheel trolleys round, slightly stunned by the overflowing cornucopia of delights.

In any big city, rising incomes and sources of wealth are hard to quantify. It could be old money, new money, Daddy’s money, Sonny’s money or merely funny money. Judging by the volumes of retail space that banks have come to occupy and numbers of ATMs at street corners alone, daily transactions are large and financial movements rapid. In Delhi, counted as one of the richest and most urbanised places of the country, the race for space defies rules and legislation. Most lawyers confirm that the courts are clogged with fights over property matters and the municipality (said to be the second-largest in the world) turns a blind eye to violations of prescribed storeys and floor space in residential areas.

Hosting the CWG may or may not be the best advertisement for Delhi as a showpiece Capital of the world. But it is a loud proclamation that it is the prime place for property speculation in the country — and the rise of funny money.