Features: Magazine | Literary Review | Life | Metro Plus | Open Page | Education Plus | Book Review | Business | SciTech | NXg | Friday Review | Cinema Plus | Young World | Property Plus | Quest | Folio |

The ‘stop press’ news is that in Noida, Delhi, a 95-acre commercial land has been sold for Rs. 5006 crore! The cost of one acre of commercial landed property is above the half century mark! What can be the square foot cost in the area for a built-up office premises? After five years, what will be the ruling market rate there? How will the other metros react to this single transaction? These and many related questions are difficult to answer unless we have full information on the demand, supply, future scope for development and the like.

Urbanisation is the most important factor for pushing up land prices. Normally, a landholder will not sell his land unless he needs money for many urgent domestic needs. When there is growing urbanisation and demand for land for development into housing and commercial complexes and windfall prices are offered, the colour of money attracts the village folk and sale of land becomes rampant. Industrial development and infrastructure such as roads, railways, dams, airports call for acquisition of land by the government/promoters at higher prices.

In present day urbanisation, the property price rise is triggered by the competition among builders and developers. When demand goes up and supply dwindles, price has to necessarily go up.

When the returns from investment in banks, government securities and company shares aren’t encouraging, investors will turn to gold/ silver and property. In India, the urbanisation factor has been of a high degree during the last 50 years or so which lead to increase in the price of land and related property.

From genuine investment, people turned to speculation for making quick and substantial profits by investing in land around the developing cities and towns.

There are no policy restrictions in our country that checks investment in property.

The revenue/agricultural land conversion restrictions are only on paper and are got over in one way or the other.

Mumbai lead the surge in property prices in our country. Delhi followed suit especially after the 1980 Asiad. The next growth centre of high intensity has been Bangalore. Mumbai builders ‘promoted’ Bangalore real estate growth. Chennai and the twin cities of Hyderabad-Secunderabad are just behind.

Where will this stop? The trend of ‘exclusive’ apartments for Rs.5 to 10 crore indicate only an upward spiral, unless nature compels man to move out of the cities to the villages.

Printer friendly page  
Send this article to Friends by E-Mail