Mallika Dureja
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When compared to the time before Covid, land prices in the country’s biggest cities have gone up by a lot. This is because the residential property market has come back after many years of slowing down.
A report from Dolat Capital last week said that land prices in Tier 1 cities have gone up by 20% to 200% since before the pandemic. The report says that Gurugram and Hyderabad have seen the most growth, at over 200%.
Dolat says that the average price of an apartment sold in Gurugram or Hyderabad has gone up by 19–79% since land prices have gone up.
The report said that MMR and Pune are the two markets to keep an eye on because prices went up by 20% to 70%, inventory overhang has dropped to a decadal low of 12–20 months, and the share of ready inventory in total inventory for Mumbai/Pune is among the lowest (4-5%) and is about the same as in Gurugram and Hyderabad, which are the two best-performing markets.
Consultants who work with large plots of land agree that the prices of both land and apartments in major cities have gone through the roof.
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“Before Covid, land in Gurugram cost between Rs 30,000 and Rs 40,000 per square yard. Now, it costs Rs 1,250,000 per square yard. It has also affected the prices of apartments there, said Anarock Property Consultants’ managing director of land services, Mayank Saksena.
Saksena said that new launches in Gurugram’s Golf Course Road Extension cost Rs 17,000–23,000 per square foot, compared to Rs 5,500–7,000 per square foot before the pandemic. Prices on the Dwarka Expressway have reached Rs 12,000–14,000 per square foot, up from Rs 3,000–4,000 per square foot before.
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Saksena said that prices aren’t the only thing going up in Hyderabad. Apartment sizes are also getting bigger, and the city is seeing luxury residential development like it’s never seen before.
“Before Covid, the most I could offer was a place with two bedrooms and 1,200 square feet or three bedrooms and 1,800 square feet. The most was 2,400 square feet. Now, he said, they are putting up apartments that are 7,000 to 10,000 square feet. He also said that developers are putting up one-of-a-kind apartments on each floor of high-rise buildings.
But he said that, unlike Gurugram, where the government controls the amount of land, Hyderabad has a good amount of land and better infrastructure.
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“In Gurugram, land has no value unless you have a permit to build on it,” he said.
Even in Bengaluru, land prices have gone up a lot since before the pandemic.
Prices for plotted developments and apartments have gone up from Rs 2,000 per sq ft to Rs 4,000 per sq ft, and residential prices have gone up from Rs 5,000 per sq ft to Rs 10,000 per sq ft, said Saksena.
He said, “Land prices in Bengaluru’s CBD (Central Business District) have reached an all-time high.” The rise in prices haven’t reduced the quantum of the land deals.
According to Anarock, at least 68 different land deals involving 1,656 acres happened in the top 8 cities in the first nine months of 2022. Last year during the same time period, these cities closed only 20 land deals totaling 925 acres.Developers agree that prices have gone up because the number of homes for sale has grown.
“After COVID, there has been a general trend of land prices going up. This is mostly because of faster sales, higher sales prices, and better infrastructure and connections. Sanjay Dutt, managing director of Tata Realty & Infrastructure, said, “Land prices are going up because there aren’t enough plots with clear titles and few regulatory hurdles.”
