Alarm over booming land trade in Surat

The land trade in Surat, which burgeoned in the aftermath of the diamond trade going through a lean phase two years ago, may not be safe, said Babu Jirawala, the president of Surat Diamond Workers Association.

"Though people have made good money through this concept of land trading, in my opinion, chances of fraud are more and people can be duped,"he said.

The recession in the diamond industry and the boom in the construction sector saw the diamond merchants in Surat taking to the real estate industry.

However, the land trading is done on trust and there are no receipts or any documents to prove the transaction. Buyers and sellers get together and then negotiate the price of property.

Jirawala said that in the absence of any records, chances of fraud loom large. "The main reason is that the land is purchased without any checks or verification. On purchasing a plot, the buyer only gets a slip as the evidence of the deal. In case of fraud, there is no way the buyer can prove that he paid money to the seller and bought the land."

Jirawala also said that the real estate boom is not going to last forever and huge investments in this sector are not prudent.

"Secondly, people are buying the land with the hope of making good profit on selling it. This has happened so far, but will certainly not happen after six months or so, as the land prices will reach a saturation point and will not rise any further. Because of this, the people who have invested lakhs in a plot with the aim of earning a few thousand bucks, might not be able to recover even their cost while selling the land," he said.

"The land trading concept is a bubble, which could explode any time. In their own interests, we would ask the people connected with the diamond industry to stay away from it," he added.

Around 2,500 to 3,000 people, most of whom are connected with the diamond industry, participate in the market, before and after work hours in the industry. On an average, around 40 to 50 dealings, totalling anywhere between Rs 1 crore to Rs 1.50 crore take place in these markets each days," said a trader involved in this business on condition of annonymity.

"This business of land trading has flourished a great deal, as both the buyers and sellers have made good money. At present, apart from Sarthana, similar markets are also held at Dabholi junction, Mota Varachha, and Nana Varachha.

Industry sources said that because of this concept of land trading, the prices of land at Sarthana, Varachha road, Mota Varachha, Nana Varachha, and surrounding areas, have almost doubled in the past one year or so.