Jun 9th 2012 | MUMBAI | from the print edition
1. Living space per person-The result is tiny living spaces of 4.5 square metres (48 square feet) per person, compared with 34 square metres in Shanghai.
2. Average house price- Prices are high. Mid-town flats cost $1m-3m. The average price of a 1,000-square-foot pad in the city is perhaps $250,000, or 90 times GDP per head. With flats out of reach, the share of people in slums has risen to perhaps 60%, compared with 20% in Rio de Janeiro and Delhi.
3. Not enough high rises- The city has 31 buildings over 100 metres high, versus more than 200 in Shanghai and more than 500 in Hong Kong and New York.
4. 60 years to fix the housing shortage- At the current rate it will take over six decades to build everyone a home.
5. Unsold flats- At the current pace of sales it would take three years to clear the stock of 28,000-odd unsold flats in the city which are complete or being built, according to Ashutosh Limaye, of Jones Lang LaSalle, a property-services firm. Pankaj Kapoor, of Liases Foras, a research firm, puts the figures at 38,000 and four years.
6. Main problems- Three things explain Mumbai’s predicament: regulations, financing and graft.
7. Red tape- “some of the most extreme land-use restrictions in the developing world”, designed to deter new migrants but which have backfired.
8. Mortgages- Mortgages are common but banks cannot fund land purchases. Developers finance construction by forcing customers to pay upfront, often without redress if the project stalls.
9. Bribes- It is not unusual to make an under-the-table cash payment of at least 20% in addition to the stated price.
10. Funding model of construction- Without banks breathing down their necks, developers and owners sit on empty flats, rather than cut prices; this is a housing market where more borrowing might be helpful.