Posts Tagged ‘property rates in Bhubaneswar’

Rising Real Estate Prices in Orissa: An Artificial Phenomenon Than A Natural Trend

Rising prices of real estate in orissa

Rising prices of real estate in orissa

It is a trend that is putting even the best in the trade go nuts. For the fifth consecutive  year, the prices of real estate in Bhubaneswar is skyrocketing at maddening pace. So what’s exceptional about this? Well, in Bhubaneswar, the capital city has experienced real estate prices have seen a hike of as much as 300%. This is not only bewildering but also stunning. With per square foot prices touching Rs 3,000 per square foot in many parts of Bhubaneswar, the rates are almost equal to that of  property prices in the expanding Noida sector in Delhi.

Though the rising prices, mostly dismissed by knowers as superficial, is mostly attributed to the fact that perhaps Bhubaneswar is the only place in the state that has access to all the cosmopolitan facilities like educational institutes, hospitals, entertainment centers and shopping malls. So even though the state has experienced an industrial boom and seen rising income levels of people, the focus of the people is only on Bhubaneswar.

However this contention is rubbished by most real estate associations which claim that the rising cost is attributed to the land price hike by the government which had in recent years hiked the base price of land. With government agencies raising land prices, real estate developers are also increasing their base price. Land cost and taxation alone account for as much as around 60 per cent of the property price in Bhubaneswar. Delay in project approval also results in price rise. Similarly government agencies like the Bhubaneswar Development Authority (BDA) and the Orissa State Housing Board (OSHB) have adopted the public-private-partnership (PPP) mode in housing schemes, indirectly forcing a hike in prices.

Earlier, the construction cost was less as the projects were executed solely by government agencies. But now, as the PPP mode has come into effect in housing schemes, the business interest of the executing agencies causes the cost escalation. Another factor that has pushed land costs in the city is the practice of land auctioning by  government agencies like BDA and OSHB. The auctioning process has no link to the local  land value. However this practice in itself is responsible for pushing costs in a particular area.

Industry experts claim that  simply by controlling the price of land, the state government can reduce building cost to around Rs 800 to Rs 1,000 per square foot, so that a two-bed room apartment in the much sought-after Pokhariput and Patia areas can be made available for around Rs 20 lakh, whereas the present price for the same is more than Rs 32 lakh. So what is required is a simplified tax rules and measures like faster approval system to address the issue of the rising prices and make the scenario more friendly for people.