Is the real estate boom in India really sustainable? Here is a thought

The present real estate scenario in India is all smiles. People from small towns and villages from all over India are travelling to the big cities in search for better education, work places and careers. Most people who make this migration never go back to their home towns except for vacations and family functions. Real estate developers are cashing in on the dream home concept, wooing such people and turning every available space into concrete and steel structures. The population migration to big cities goes on like clockwork and it drives Indian real estate prices upwards, making investors a happy lot as well.

But, is this seemingly never ending demand for real estate in India real? Is it sustainable? Will prices infinitely rise to cater to the greed of investors? Will a reality check on the prices be brushed under the carpet blaming a global recession or unemployment again?

No, we think. The upward trend is not going to carry on forever. The products and prices have to become innovative. There has to be long term planning done and implemented. Cities contribute 90% of government revenues and 60% of India's GDP while only 30% of India's population lives in urban areas today. And look at the state of our Indian cities. They have grown in size and wealth but failed completely in basic areas like infrastructure, power, water and sanitation! 25% of all urban homes in India do not have access to sanitation! Can you believe that? A quarter of all housing in urban areas in India are slums, according to the 2001 census. While developers keep churning out homes that no one can afford! (We or our friends sure cannot).

Roads, electricity, water, waste management, health and sanitation services are critical areas, where focus is immediately required. Planned, affordable housing projects are the need of the day to uplift communities and improve the living standards of our Indian cities, which is sliding down the charts everyday. Developers plonked in the concept of satellite, stand alone townships and SEZs aiming to build communities but water, drainage and electricity cannot be privately supplied. So that is not really a solution. Urbanization is what we need to focus on, as a country, or in the next thirty years, the real estate boom is going to crumble under its own, disproportionate weight.

Do you think your IT company can run for years in a city whose infrastructure is failing or will fail in the next coming years? Do you think that the intelligent team of professionals that works 24x7 for you to generate profits will keep living in these conditions forever? Do you think they will buy their dream home in a city which is as good as hell's back door? Don't you think they will move on? To better urban scapes?

They will. So will the lucrative foreign investments. All we will be left with, are slums, mismanaged waste and debt restructuring presentations.