The real estate sector is booming in India. Areas just outside the four metro cities have seen land rates shoot up like a NASA rocket.
A textbook case is the suburb of Gurgaon touching the southern border of New Delhi. Till 10 years ago it was a dusty under-developed area with bad infrastructure. It was not a hot favourite for house-hunters and real-estate developers. How can I say all this? I had relatives living in that area and have been visiting them since I was 11-12 years old. I have seen that area develop as I was growing.
Then came the multi-national corporations, the call centers and the big brandnames. These were followed closely by the shopping-mall culture and a major empowerment of the young working Indian. All this meant that within a short span of time on a 4 km stretch of the Meherauli-Gurgaon road there were 6 shopping malls standing shoulder to shoulder.
While individually these were no where close to their western counterparts, taken together they formed a solid block of shops surrounding on of the busiest roads connecting Gurgaon with South Delhi. Within months the Meherauli-Gurgaon road became a nightmare for regular commuters. Being stuck in traffic for hours became normal.
Yet the property prices in Gurgaon kept increasing. New real-estate projects started springing up all over the place. There were buildings but no roads. Homes but no water or electricity. The boom was fueled by the ITeS boom in India and rise of home loans where young professionals starting their first job were able to buy flats and land. People made a lot of money selling dreams.
But what is the reality? Infrastructure is still trying to catch up with Gurgaon. Non-existant transport facilities are being supported with a new metro system. But what about water?
What about sustainability?
A crore’s worth of property is not of any use if you do not get water when you want to have a bath or electricity when you want to sleep. While power shortage can be removed (if your children are lucky then maybe in their lifetime) what will we do about water?
Study sees dramatic drop in Indian groundwater – longterm prospects are anything but bright for a good supply of water.
With a declining water table, unpredictable rains the long term forcast for Haryana points towards it becoming an extension of the Thar desert.
What will happen to the billion dollars worth of real estate? The investment in our future will be equal to a pile of sand?
Lack of sustainable development and blind destruction of the natural shield that is Haryana does not give a solid foundation to any kind of long term investment (for e.g. property investment).
The above factors make the real estate boom in India a bubble waiting to burst. When this bubble bursts a lot of people will be left with shattered dreams.
Few people though, will be left with a load of money they made selling unsustainable dreams.