By Dr Sanjay Chaturvedi, LLB, PhD
China’s Real Estate bubble any time can burst. Huge inventory of almost 5 crore units are waiting for takers. A documentary at YouTube about Ghost Towns is very very scary since China have constructed cities and not a singal human is at sight.
You can watch the documentary on Chinese Real Estate Bubble : Click Here
The dead investments into real estate have created Ghost Towns in China. The investment of Liquid assets in Sunk Cost or Dead Investment have made such a big mess.
Is India too going Chinese way? Mr S B Dangaych , CMD, Sintex Industries Ltd told Accommodation Times that Indian Real Estate is dead investment. Huge construction going on and soon it will follow Chinese way. Rental housing is need of the hour, he added.
In 2002, Navi Mumbai was having similar problem. IT park on Vashi Railway Station had rent of Rs.14/- per sq ft during 2002 to 2007. CBD in Navi Mumbai had no takers. There was not a single light on in the evening and entire area was treated as ghost town.
Recently, Government of India had started securitisation of gold. Government wanted to stop dead investment in gold and hence gold bonds were introduced. In real estate too, huge investments are made and millions of sq ft are been constructed with no takers insight.
Over 3 lakh residential projects are under construction and by 2022 it will be huge finished stock available to be occupied. The investors in real estate not even getting 7% capital appreciation. In India Business Week, BBC panelist have estimated that Indian Real Estate will be stagnated till 2022 because of unrealistic price and huge inventory piling up.