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The Paradox of Plenty Real Estate: Why India’s New Skyscrapers Are Standing Empty
The glittering skylines of India’s major cities tell a story of progress and ambition. But behind the shimmering glass of these new residential towers lies a troubling secret: many of the homes are unoccupied. Financial commentator Sharan Hegde has recently drawn attention to this growing paradox, where a frantic construction boom is ironically making it harder for everyday Indians to find a place to call home.
Hegde describes this situation as a “ghost tower economy.” He argues that the market isn’t being driven by people who need a place to live, but by wealthy investors who are buying properties as financial assets. This is especially true in prime urban centres like Mumbai and Gurgaon, where luxury apartments with jaw-dropping price tags are snapped up, only to remain empty. These properties are not treated as homes but as investments, creating an artificial demand that inflates prices and pushes the salaried class out of the running.
The real estate market in Hyderabad serves as a cautionary tale. Once considered a more affordable alternative, the city experienced a speculative frenzy that led to massive overbuilding. Now, with more supply than demand, the bubble is showing signs of bursting, with resale values in some areas dropping significantly. This highlights the inherent instability of a market built on speculation rather than genuine need.
To combat this trend, Hegde proposes a series of bold reforms aimed at making housing affordable again. His suggestions include:
A Vacancy Tax: A levy on residential properties that remain unoccupied for more than a year to discourage homes from being left empty.
Higher Duties for Investors: Increased stamp duties and taxes for those purchasing second or third properties.
Tougher Regulations: A temporary halt on new construction projects in areas that already have a surplus of vacant homes.
The goal of these measures is to shift the focus of the real estate sector from creating “hollow assets” to building living, breathing communities. The ongoing debate sparked by Hegde is a critical one, questioning whether India’s cities will be for everyone or just for the highest bidder.
Source :- BT