Nagpur realty prices see major spurt

Real estate prices in Nagpur are soaring like never before. Land prices in the city have skyrocketed, which according to builders and real estate agents is unprecedented and definitely not sustainable.

Three villages-two on the Amravati Road (National Highway No 6) and one on the Wardha Road (National Highway No 7)- have witnessed major spurt in land prices. Builders said that villages Waddhamna and Gondkhairi on Amravati Road and the entire area next to the Butibori Industrial Estate have caught the eye of investors.

While two years earlier agriculture field bordering Amravati Road in Waddhamna and Gondkhairi were available for Rs 2.5-3 lakh per acre. Now, these are priced anywhere between Rs 15 lakh and Rs 17 lakh per acre - a five fold increase.

Similarly, land close to Butibori, where the Sahara City mega-project is to come up on the Wardha Road, was being quoted between Rs 6 lakh and Rs 7 lakh per acre two years ago. It has now skyrocketed to around Rs 35 lakh per acre.

Agricultural land, 3-4 km away from the Wardha Road, which was being sold for Rs 2 lakh to Rs 3 lakh per acre, is now fetching Rs 20 lakh. Land on the Wardha-Chandrapur fork of National Highway No 7 (close to Jamb) was available around Rs 2 lakh per acre in 2000, today carries a price tag of Rs 35 lakh.

Inside the city, prime land in Civil Lines was quoted at Rs 1,100 to Rs 1,300 per sq ft few years ago, today costs anywhere between Rs 2,200 and Rs 2,500 per sq ft. And this is just the land price, exclusive of any construction thereon.

"Prices in some areas of the city are 20 per cent more than what real estate costs in Hyderabad. This is ridiculous," said noted builder Shabbir Vali of Sadiq and Co. "The city hasn't seen such escalation in the past 40 years," Vali remarked. He said, a bit of appreciation in land prices was acceptable and welcome, but such an increase borders on bizarre. "The bubble can burst any day," he predicted.

The top booking agent for Sahara City, Parul Himanshu Verma, confirmed that land rates around the proposed project have jumped. "It should be anywhere around Rs 35 lakh per acre now," she said from Delhi. Sahara City, she said, was still the best deal in the area. Sahara India is offering a one bedroom, hall, kitchen and storeroom unit for Rs 14 lakh.

Ashutosh Shewalkar of Shewalkar Developers, with a number of mega projects in the city, attributed the "mad rush" to invest in costly land to "typical Nagpur psychology and herd mentality".

Explaining the phenomenon, he said, "You have one successful fabricator and the next day, twenty fabrication units come up. One builder makes it big and hundreds open shop within the week."

Shewalkar said that there was no end user in sight here. "These people are selling the property among themselves. These inflated prices are totally artificial and not rooted to any sound economic basis," he said.

He said that a slight increase in prices was acceptable and could be attributed to industrial growth in Butibori or the general boom in the nation's economy. "But such rise has no realistic basis," he said adding that a similar boom was experienced in Mumbai after the Harshad Mehta scam, when investors took money out of the share markets and put it in real estate. Shewalkar further added, "It's a buying frenzy."

Abhijit Dudhane of Apar Developers also maintained that there were "no genuine buyers" involved in pushing up the prices. "Look at what is happening at Besa, Beltarodi, Pipla, and Shankarpur. These areas have been declared as residential areas and are being developed as such. The escalation there too has been pretty high, but at least people will live there, while the same is not the case with the city's outskirts," he said.

Dudhane said that farmers who still had small holdings in the areas where prices have gone up are happy today. "They are selling and moving some 15-20 km away to buy much bigger fields. Others who sold early feel sorry today," he said.

But nobody can answer the question as to when and where it will stop. All that they know is that the market is moving and it has a mind of its own.