The surreal side of a real estate boom
The exploding population in an expanding economy have spurred a real estate boom wave that is difficult to grasp for many, reports Narayanan Madhavan.india Updated: Nov 16, 2006 17:08 IST
If you were a Delhiite some ten years ago, chances are high that you may not have heard of Kundli.
It lies somewhere near the more heard-of Sonepat in Haryana. But if you open your newspapers in the capital these days, you will find Kundli popping up in box ads, displays and classifieds.
The real estate boom in the National Capital Region (NCR) had begun decades ago with a reluctant push in Noida, but economic reform, cheap interest rates, growing incomes and the sheer demographic pressures of an exploding population in an expanding economy have spurred a wave that is difficult to grasp for many.
Gurgaon came first, and Ghaziabad next after Noida. Faridabad is now no longer an indutrial satellite town but a separate city that promises malls, offices and glitzy condominium-style townships. To the city's west, a highway is planned to connect Kundli with Sonepat and go beyond Gurgaon to Manesar, after which lies Bhiwadi.
Apartments, townships, gated communities and plots are promised everywhere. A tram service has been proposed between Gurgaon and Manesar and on the other side of Delhi, Ghaziabad and Agra are to be linked, from somewhere near Greater Noida.
All this sounds exciting, on the face of it, but I am not sure what this is all leading up to. To be sure, the governments of Haryana, Delhi and Uttar Pradesh have agreed on making the NCR a hub for everything from motorbikes to software.
The Delhi Metro and the DND (Delhi-Noida-Delhi) Flyway that connects Noida with South Delhi in an amazing toll bridge across the Yamuna. These certainly are proof that the capital can create world-class infrastructure.
However, dozens of builder firms that have sprung up to build infrastructure, housing, retail and industrial townships in many of the boom areas are less familiar to the average citizen than even the somewhat familiar Kundli.
Just what is going on?
I should think that a bandwagon has emerged on the back of cheap interest rates and housing demand for a growing population. This in itself is not bad, but bandwagons have this nasty habit of getting overcrowded and I am not sure what the last straw would be on the backs of the camels that walk close to the Aravallis, where south Delhi's boom began to take root.
Questions, questions, questions: How equipped are civic authorities in towns like Kundli, Manesar or Bhiwadi to face urbanisation and the institutional needs that brings? Where will the water come from? How will the schools and hospitals get organised around them?
We see ads that show happy couples to sell apartments that have broadband and airconditioners, but fancy descriptions of RO (reverse osmosis) water plants are few and far between. We cannot be too sure on how apartment owners will be serviced and billed for water, and there is no significant assurance on electricity, though Anil Ambani's planned plant at Dadri could prove to be a gain in the future.
It is wise to remember that large parts of downtown Delhi had to wait for years to get municipal water.
Maybe I am cynical and underinformed, but I see too many ads, involving too many new names, promising too much in a culture of administrative vacuum. If the current furore over farmer protests and allegations of land grab in the building of special economic zones (SEZs) is any indication, governments that run the National Capital Region need to look hard beyond the builder optimism triggered by cheap interest rates.
Something in the seemingly reckless expansion reminds one of the East Asian boom of the 1990s that resulted in a real estate bubble, and then of the Internet "dotcoms" that followed soon in a rash of growth only to find most of the wannabes falling flat.
All that sounds like spoilsport behaviour in a country stepping on the accelerator with eight per cent economic growth, but a little bit of caution may not be entirely out of order.