New Delhi: Partha Bose is on the move. After marrying in June, he’s checking out apartments a half-hour drive from his parents’ two-bedroom home in New Delhi.
“I’m more open to taking on debt than my father,” said the 28-year-old events manager, who has lived with his parents all his life. “Job opportunities have increased quite a lot compared to even fiveyears back.”
The fastest wage growth in Asia and expanding career choices are increasingly splitting India’s family unit. Young couples can now afford to buy their own apartments instead of sharing often-cramped family homes, eroding centuries of tradition and sometimes leaving elderly parents to fend for themselves.
The shift is fuelling demand for homes in New Delhi, Mumbai and Bangalore, where prices have more than tripled since 2004. India will need as many as 10 million new housing units a year by 2030, the Manila-based Asian Development Bank estimates.
“Demand for housing will continue to be quite strong as the starting salaries of the young generation are almost triple that of a few years back,” said R.K. Gupta, who manages $68 million (Rs279 crore) of stocks at Credit Capital Asset Management Ltd in New Delhi.
Wages will rise 14.5% on an average in 2007, the fifth straight year of double-digit increases, according to Hewitt Associates Inc., a Chicago-based human resources company. Last year’s 14.4% increase eclipsed that in China.
Typically, Indian customs dictate that sons brought their wives to live with their parents, leaving daughters to join their husbands’ families.
Extended households provided a safety net for the elderly in a country where only 10% of the 400 million workers have pension plans. Thenumber of senior citizens who depend on wage earners for survival rose to 131 per 1,000 in 2001 from 89 in 1981, government figures show. India has 71 million people aged 60 and above.
“Job opportunities across cities and the rising affluence of households as more women join the workforce is breaking up the Indian family as we knew it,” said Gitanjali Prasad, author of The Great Indian Family (Penguin Books, 2006). “The question is: What will happen to the old parents?”
India’s government in March introduced a Bill punishing children who abandon dependent parents with a three-month jail term and a Rs5,000 fine.
The Bill also proposes setting up tribunals to deal with cases speedily. While dependent parents can claim maintenance from their offspring under a 1973 law, an overburdened legal system means suits may take years tobe heard.
“If you are staying alone, there is always the fear of what will happen to you if you fall ill,” said P. Madhavachari, 76, a retired civil servant from New Delhi. “We don’t have the necessary support system in India to take care of the elderly,” he added.
In January, Madhavachari and his wife stood tradition on its head. They moved toBoston to live with their son, who migrated for work seven years ago.
A marketing job at IBM Corp. in Bangalore lured Jasleen Makker from her parents’ New Delhi home last year. Makker and her husband decided to buy their first home when the rent for their apartment in one of Bangalore’s middle-class neighbourhoods rose to the equivalent of $363a month. “We were paying ever-increasing rents in Bangalore,” said Makker, 28. “Once we made up our minds, interest rates really didn’t matter.”
Mortgage rates have fallen to 11.25% for a 15-year loan from as high as 18% in the 1990s, according to data compiled by Bloomberg. Lending increased 11-fold to $38 billion in the five years through 2005.
More than 80% of borrowers are buying their first property, according to audit firm Ernst & Young. The average age of home-loan recipients plunged to 33 in 2005 from 43 in 1999.
Still, the booming market is pushing home ownership beyond the means of many Indians. Price rises in cities such as Hyderabad, Mumbai and New Delhi averaged between 50% and 100% last year, according to Los Angeles-based property consultant CB Richard Ellis Inc.
Roshni, a legal and accounting consultant who uses only one name, said she and her husband have abandoned their dream of buying a home in Mumbai. Instead, they will remain in her in-laws’ three-bedroom apartment with their eight-year-old son.
“Property prices in Mumbai are now comparable to those in New York,” said Roshni, 37.
Two-bedroom apartments in Mumbai’s Malabar Hill area sell for $610,000-854,000, or Rs2.5-3.5 crore, said S.N. Chopra of Hill Estates, a local property consultant. Rents range from $2,500-3,600 (Rs1.03-1.48 lakh) a month..
By comparison, a two-bedroom apartment in downtown Manhattan costs $1.74 million (Rs7.1 crore) on an average, said Miller Samuel Inc., a New York real-estate firm.
Bose, the Delhi events manager, said he is heading to the suburb of Greater Noida because homes there are more affordable. His father bought his first apartment at the age of 50, he said. “I’m ready to take more risks than probably a generation ago,” said Bose, who plans to apply for a mortgage. “I feel more confident about my future.”