Globalization and Urban Land Market in Developing Country – Trends from Ahmedabad
The real estate prices increased
due to number of reasons, after the Structural Adjustment Program (SAP), conceived in India in 1991, under the broad specter of globalization. Firstly, tremendous economic growth and influx of capital was
expected in India. Obviously that would go to the urban centers. It was expected that, as it happened in OECD and NIE
countries after the liberalization, invsetible capital went to the real estate market leading to tremendous increase in property prices. Foreign capital had begun coming to the country and non-resident Indians (NRIs) too had shown willingness to invest in real estate to keep their contact with their cultural roots. Also, investments do not yield high return in the developed countries whereas it does in countries such as India and hence, dollar investment was expected. In the meantime, Hong Kong was to be handed back to China and it was expected in India that businesses will dislocate and India would benefit. Mumbai being the financial capital of India was the first city to observe the effects of SAP. Ahmedabad, with other metropolitan cities entered the real estate boom later. The conservatives continued to harp on the theory of constrained supply of land due to regulations a cause of such high price increase in the real estate market. While the process of deregulation has gradually continued throughout the decade of the nineties, the land prices came down even before some of the legislation considered most villainous was withdrawn. It was expectancy with regards to demand at the high end of the market, the real estate prices jumped for a short period of time. That demand not coming through, the prices crashed and many had to sell the housing units constructed by giving good amount of incentives to the buyers. Numerous of them built hurriedly in the guise did not maintain quality standards. As a result in the earthquake of January 26, 2001, several of them were converted to rubbles burying couple of thousand people.