In Noida, real-estate middlemen cluster like lemmings in a building called Chokhani Square and in a couple of adjacent buildings, next to the Sector 18 Metro station. From here, Vikas Singh, a 25-year-old salesman who works for a firm named Property Guru, took me on his motorcycle to Sector 75 to examine the site of Gardenia Golf City. In five years, Vikas had completed a three-year bachelor’s degree in chemistry in his hometown of Patna. (“In Bihar, things always run late,” he explained, grinning.) Then he obtained an MBA in Allahabad before coming to Delhi and joining Property Guru. Like the other young realtors I met, he was almost painfully polite – a deep disconnect with the intrusive, bullying text messages that led me to them.

On either side of the access road to Golf City lay more upcoming developments – Supertech Cape Town and Supertech North Eye – and the dust raised by construction was so thick that we both started to gasp and cough as we rode through it. Work on Golf City had barely begun, so Vikas parked his motorcycle outside a Gardenia office and we went in to see a sample unit. When we returned, just 10 minutes later, we had to push a blanket of dust off the seat.

An armed security guard stood at the door to the Gardenia office, his gun considerably more impressive than the weapons of Noida’s constabulary. Vikas must have noticed me staring at the pistol, because he whispered, “That’s his own gun. These guards get Rs 1,200 added to their salaries if they bring their own guns.”

“Why do you need him?” I asked Vikas.

“There’s always so much cash on the premises,” he said. “When people pay black money, we have to hold it here before taking it to the bank.”

Vikas assured me that Golf City would be ready for occupation in three years; this must be a sort of glib industry standard, because I later realised that I had been offered that exact timeline at nearly every property I visited. These deadlines are inevitably elastic because, according to Sanjay Sharma, the managing director of a realty firm named QuBREX, the penalties for lethargy are not high enough. “When they say three years, they know they’re lying,” Sharma said. He knows of one project that was launched in 2004 and has still not unveiled its apartments.

Another developer sold one phase of flats, did no work for three years and, having overshot his deadline, merely launched a second phase. (Back in Gurgaon, in fact, Rawat had tried to soothe me about M3M’s ability to complete Merlin by pointing out that one of the company’s promoters had thrown his daughter a Rs 31 billion wedding, a price tag that had whisked Delhi’s tabloids into a fine frenzy. “And if they have that much money for a wedding, you can be sure that they have money to complete the project,” he said. In fact, the father of that bride was somebody else, but somehow I thought it was kind of Rawat to offer this lie as comfort.)

Only recently have regulators started to decide that this attitude needs changing; in August, the Competition Commission of India levied a Rs 6.3 billion fine on DLF, India’s largest real estate developer, for, among other things, “abnormally delay[ing]: its Belaire project in Gurgaon. “I got so fed up with delays that I decided I’d work only with two builders,” Sharma told me.

Sharma is an affable but perennially harried man. His office in Gurgaon has seven phones, including his mobiles, and they each rang at least once when I visited him there; he gets around 60 real estate spam messages a day, and although they annoy him too, he admitted that they help him do his job. (On a whiteboard jammed with text about marketing strategies, I spotted, with a circle around it, the term “Raw Junk SMS”.) In the vending of real estate, he said, the humble SMS was utterly vital.

If a developer sent forth a fleet of spam messages and sold out his property instantly, no expensive print advertisements or Google AdWords investments would be required. On an SMS, news travels cheap, and it travels fast. “Even if I was a developer, the first thing that would occur to me is SMS,” Sharma said. “Hours count in this business.”

Sharma has a PhD in computer science, but he decided very early, he said, “to move from cyberspace to the real estate space”. Frequently, Sharma conducts interviews with real estate developers, which he videotapes and uploads onto YouTube. In one video, Sharma asks one of M3M’s promoters why Golf Estate was initially offered as “invitation only”, his fingers marking out air quotes. “We start selling like that because, you know, the people in this group are very small,” the promoter replies. “We know our customers very well. Munjal will buy. Virender Sehwag will buy … We know the people who will buy.”

By a twisted market reality, according to Sharma’s analysis, prolonging the construction of a project works for both the real estate developer and the real estate investor – and, by his reckoning, roughly 70% of buyers are investors, people looking to flip the apartment as soon as it is profitable to do so. Builders will accept advance payments for buildings whose foundations aren’t even glints in a bulldozer’s eye, and then promptly use that money to buy land elsewhere. “If these builders were suddenly asked not to sell any more projects, I’m telling you, most of them couldn’t balance their books tomorrow,” he said.

For the investor, a delay allows more time for the price of an apartment to appreciate, making a flip potentially more profitable. Sharma thinks that less than a quarter of real estate investors in Noida and Gurgaon actually make money, because the risks are massive. But the rewards, if they come, sound magnificent. “I know one woman who bought a flat for Rs 70 lakh. She paid maybe Rs 7 to 8 lakh as an advance, and then she paid interest on a home loan for around a year and a half,” he said. “So say she paid Rs 1.5 lakh of her own money in total. In a year and a half, the price of the apartment touched Rs 1.5 crore, and she sold. So she made a profit of Rs 80 lakh. And that’s not even the best story I can tell.”

To the untrained ear, I told Sharma, this sounded like a cross between a Ponzi scheme and a bubble: investments in, quite literally, castles in the air, to be sold and resold for multiplicative values, predicated on an asset that was in the builder’s best interests to not deliver, and utterly vulnerable to the sort of single, well-directed pinprick administered by Greater Noida’s farmers.

Sharma agreed, in large part. “There isn’t a bubble of real homes,” he said. “If all these apartments were actually built, and built fairly to schedule, I guarantee you that they would find real buyers. The demand is out there. But there is a huge bubble in imaginary homes – in homes that will be delayed indefinitely or just never get built. Of all the projects launched in the last year and a half, the majority of them are going to fail, for one reason or another. And a lot of people are going to lose a lot of money in this.”

This essay was first published in Caravan in 2011.

Excerpted with permission from The Web Beneath the Waves: And Other Reports from Our Tangled World, Samanth Subramanian, Westland.

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