India Must Tread Cautiously in Real Estate to Avoid China’s Ghost Cities
India must pursue a cautious, demand-driven real estate expansion and avoid repeating China’s mistakes of overbuilding and creating “ghost cities,” according to Brigade Group Chairman and Managing Director Jaishankar. Speaking at a developers' conclave, Jaishankar highlighted the economic momentum and urbanization opportunities in India, but also warned against unchecked construction and speculative development.
China built too much, too fast, and without real demand. Jaishankar shared his personal observations of large, fully constructed residential clusters in China that remained unoccupied, a result of state-driven expansion that ignored affordability and absorption capacity. These excesses ultimately contributed to the collapse of major Chinese developers and destabilized the broader economy.
Highlighting the scale gap between the two countries, Jaishankar noted that as early as 2018, a single Chinese developer was selling around 50,000 homes every quarter, while the entire Bengaluru market was selling a similar number in a full year. “That kind of volume shows potential, but it also shows the danger of chasing numbers without fundamentals,” he said.
India today is roughly 20 years behind China on the urbanization and income curve, but Jaishankar views this lag as an advantage. “We can learn from China’s failures. Growth must be incremental, location-specific, and driven by end-user demand,” he emphasized. He stressed that India’s large population continues to constrain per capita income and housing affordability, making disciplined planning essential.
Jaishankar also noted that real estate growth must align with rising incomes, employment generation, and infrastructure development, particularly in Tier-II and Tier-III cities. Developers should prioritize transparency, financial prudence, and mixed-use developments that integrate work, living, and recreation. “Trust and sustainability will decide who survives the next cycle,” he said.
As India’s real estate market expands alongside a USD 4 trillion economy, the sector’s future depends not on speed or scale alone, but on avoiding the excesses that turned China’s boom into a crisis. Jaishankar’s insights provide a roadmap for sustainable growth in India’s real estate sector, emphasizing the need for a balanced and demand-driven approach to avoid the pitfalls of overdevelopment and economic instability.
India’s real estate market is at a critical juncture, and the lessons learned from China’s experience can help guide developers and policymakers towards a more sustainable and equitable future. By focusing on end-user demand, financial prudence, and integrated development, India can avoid the ghost cities and economic dislocations that have plagued its northern neighbor.
