Homes are hard to find in Mumbai

By Karishma Vaswani
BBC Mumbai business correspondent

Trying to rent or buy a property in the Indian financial capital, Mumbai (Bombay), can be a disastrously expensive affair.

Mumbai landlords charge high rents, but the flats are not luxurious

Not only is it hazardous to your pocket, it can also be rather hazardous to your health.

Within the first couple of days living in Mumbai, I realised that finding a flat to rent here was not going to be an easy task.

The properties on display are dismal at best - and without a seasoned real estate agent to help me sift through the dismal from the dire, I would have been lost.

Enter Kailash Rajani, real estate agent extraordinaire.

He has been in the business of buying and selling property in Mumbai for the last two decades.

And he has seen the city change in the last 20 years as the Indian economy has grown.

"Trying to turn Mumbai into Shanghai will take a long time - at least another 20 years," he said, as we exited from yet another crumbling and dilapidated flat inspection.

Extortionate

"These flats are in the most expensive areas of Mumbai. Rent here will cost you nothing less than £1,000 ($1,800) for a tiny 500 sq ft (55 sq m) apartment.

"And yet there are no facilities, no swimming pool, no security, no gym. The demand for property has grown so much in the last year, that supply is way short of demand. It's a seller's market."

And a landlord's market. Here in Mumbai, landlords can demand extortionate amounts of money for a rental deposit - up to 25 times the amount of rent you would pay in a month.

Living over the shop, Mumbai-style

The reason behind this is the Bombay Rent Act of 1947, which states that after living in a property for a certain number of years, the tenant can stay there for as long as he wants at the rental price that he paid when he first leased the property.

So landlords are terrified that their million-dollar properties could be inhabited for an indefinite period of time - the high deposits are one way to put off any potential squatters.

Despite those high deposits, residential leasing and buying prices in Mumbai have jumped more than 30% in the last year. Mr Rajani says that is mainly thanks to the stock market boom in India.

"The stock market has almost doubled in the last year," he says. "People have made a lot of money on shares.

Combine that with the fact that now you have income from both people in the family - both wife and husband - and buying or renting a flat isn't the financial burden it used to be 10 years ago. Now it's achievable."

Achievable for Indians yes, but not so achievable for a lowly journalist. My Mumbai flat-renting dreams were yet to be realised - and this was after seeing at least 10 flats.

Rubbish

One landlord had the audacity to charge me £1,500 for a 400 sq ft apartment. Granted, it was in the centre of the city - and the address, I was told, was superb.

When we arrived at the premises, we discovered the lifts were out of order - and had been for some time. As we struggled up the four stories, I was stunned by the amount of refuse lying around on the stairwells.

"Is this normal?" I asked Mr Rajani's representative, Vijay Menon. "Doesn't the management of the building object to this?"

The accommodation looks much better once the lights go out

"No, not at all!" Vijay smiled. "The flats are the property of the owners - but the building is owned by one landlord. It's the case with many buildings in Mumbai.

"The landlord doesn't care whether the lift works, or there's running water or lighting in the exits and entrances of the building - he's waiting for a developer to tear down the place, and he'll make a nice packet from it.

"And no owner of any flat wants to put his own money down to upgrade the facilities. Why should he? No one else will."

This system of ownership - or "pagri", as it's called in Mumbai - is a popular one. But as a result of the deterioration of buildings in the city, many buildings have become co-operative housing societies, where the landlords of the flats in the building own the building together.

They make all the important decisions for the building - whether to build more car parking space, whether a balcony can be extended - and who should live in the apartments of their building.

And that's the next step of my Mumbai rental nightmare. I've found a flat - but I'm yet to confirm that I can live there. I have to pass an interview with the co-operative housing society of the building first.