Indians, because of the primarily agricultural roots, have immense respect for their land holding. The same concept has been extended to housing, and hence, we see the need to own a house before anything else. That explains why even large Indian cities have primarily independent houses, while similarly sized (both by area and population) cities elsewhere in the world have a culture of apartments.
As land availability goes down in Indian cities, land prices do go up. In the late 90’s and the early part of this decade, we saw the trend that created the first wave of small apartments. Individuals with relatively large residential sites enter into a joint venture with builders to build apartments. In return, land owners got a few units, depending on the valuation of the land and the investment made by the builder.
Recently, we see another solution adopted to increase the land availability within a city, based on the Greater-Mumbai (don’t use Bombay anymore; Sainiks are around everywhere!!) model. So, we saw the Bangalore and Hyderabad cities expanding tremendously. This created land within the city limits and the corporate world was quick to buy large amount of land at cheap prices, even though necessary infrastructure – like roads, water, sanitation, electricity- wasn’t completely available.
Ten to twelve years from now, the additional land created by expanding the city will be used up. I don’t see the FAR (Floor–Area Ratio, used to determine the amount of build up area in a given piece of land) going up greatly; definitely not outside the relatively quake-safe zone of the Deccan plateau. Then, I see people going back to the 90’s model, albeit with a difference. There will be few people holding large enough residential plots for an apartment. A small community of people will come together, say owners of two-four adjacent plots, to form a large enough area for a builder to start an apartment project.
So, if you are a builder and interested in such deals or need some more ideas, please contact me. Full version of the idea comes at a premium!!!