The prices of residential real estate projects in and around the city are poised for a sharp appreciation on the back of a surge in land prices in the past six months.
"Land prices have jacked up 4-5 times in the past six months and this is bound to precipitate a steep rise in prices of housing projects. The average price of land in the peripheral areas of the city has shot up from Rs 20 lakh per acre to Rs one crore per acre post the notification of the final Comprehensive Development Plan (CDP) of Bhubaneswar prepared by IIT-Kharagpur. With the CDP delineating the approach roads to be built near the plots, the land owners have struck a profitable deal with the buyers, demanding more for their plots", said a top official of the Orissa chapter of the Confederation of Real Estate Developers' Association of India (Credai).
Some real estate developers have already gone for an upward revision in prices of apartments from Rs 2500-3000 to Rs 4000 per sq ft, he added.
Of late, the city's realty market has witnessed an interesting trend with miners increasingly building land banks in the aftermath of suspension of many mines.
"The miners are increasingly getting into land purchase and are building land banks in and around the city so that they can sell them at lucrative prices to realty players", said the official.
As such, there is no benchmark price of land for any particular location in the city and this has given a free rein to the land owners to quote a price at their will, he stated.
Also, there is a huge demand supply mismatch in the city's realty market and this has allowed prices of housing projects to escalate without any correction.
More From This Section
The only time in the past few years when the customers had got a breather was the time when Credai-Orissa had announced a price cut of about 10 per cent for the new residential projects in the wake of the wake of the economic downturn in the second half of 2008-09.
Affordable housing projects still remains a far cry even though BDA has announced plans to come out with new mass housing projects in 4-5 locations in and around the city and also the reservation of up to 10 per cent each for Low Income Groups (LIG) and Middle Income Groups (MIG) in two projects proposed to be taken up on the PPP (public private partnership) mode.
Real estate players have pointed out that there is a good scope for affordable housing projects in the city and felt that for promoting such projects, the state government needs to play the role of a facilitator and provide land for the projects.