Cashing out the city: speculative urbanism through the lens of India’s real estate industry

Authors: Devika Narayan*, University of Minnesota - Minneapolis
Topics: Urban Geography, Economic Geography, Development
Keywords: Speculative urbanism, Finance capital, Land and real estate
Session Type: Paper
Day: 4/11/2018
Start / End Time: 3:20 PM / 5:00 PM
Room: Riverview I, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded

Property bubbles and escalating real estate prices are a defining feature of global cities, and cities in India are no exception. The dynamics of the real estate sector has a direct effect on the cityscape in social and spatial terms: It shapes the built environment, the cost of living, and the overall lived experienced of urban communities. In order to better understand the linkages between global urbanism and property markets, we examine the shifting financial logics of the real estate industry in India. We focus on the financial structure and financial compulsions of global investors, local developers, and real estate consultants, over the past decade, to unpack corporate practices and investment behaviors that form the basis of speculative urbanism.

We begin by noting the unique peculiarities that characterize India’s real estate market. Prices are very high while demand is weak. Unsold inventory is piling up and developers are still launching new projects and guaranteeing high rates of return to global private equity firms, which have flooded the Indian market with capital. Builders are setting extremely high prices while being highly leveraged themselves. These are some the contradictions we probe. We rely on interviews with real estate consultants, land brokers, equity fund investors, and developers, and an analysis of the business press and trade reports, to explore these puzzles. Our paper analyzes the shifts in the financial profile of the real estate sector and in doing so examines how global finance is reshaping the urban economy.

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