Broken House

The residential property market was limping; the slowdown has now brought it to its knees

- K. Sunil Thomas

ALL SHIMMERING GLASS and steel, One BKC became the brightest star in India’s real estate sector when private equity investor Blackstone snapped up the office complex for ₹2,500 crore a few weeks ago. It was one of the biggest real estate deals in the country. Home to the likes of Amazon, Facebook and Bank of America, One BKC is a fully-rented out office space spread across seven lakh square feet in Bandra-Kurla Complex (BKC) in Mumbai.

BKC, the corporate hub of India’s commercial capital, recently saw some other big-ticket property deals, too, such as K Raheja Corp buying the Citi Centre office complex and the Japanese conglomerate Sumitomo offering a reported ₹2,000 crore plus figure for a three-acre plot.

It is, however, an entirely different story in the residential property market. There are some 12.8 lakh houses lying unsold in the top 30 Indian cities, a figure that has risen by 7 per cent in a year. Worse, there are some five lakh homebuyers left in the lurch because of stalled projects across the country. And many small and medium real estate companies have gone bust in the past few years.

In July, the Supreme Court ordered the government-run NBCC to step in and complete 42,000 flats that were left incomplete by Amrapali Developers in Greater Noida. The apex court also declared that homebuyers could be considered as operational creditors in bankruptcy proceedings, and thus are entitled for a share of the money coming in from bankruptcy proceedings.