Post the pandemic, land parcel prices have skyrocketed in India’s major metropolitan cities as the residential real estate market has recovered following a protracted period of decline. The two cities that have seen a significant surge in prices are – Gurgaon and Hyderabad.
For tier 1 cities, land values have increased dramatically since the pre-pandemic phase, based on research released by Dolat Capital, a trading firm. The hikes range from 20% to 200%. According to the survey, Gurgaon and Hyderabad have experienced the most significant increase of more than 200%. Dolat claims that the rise in land costs is reflected in the average selling prices of apartments in Gurgaon and Hyderabad, which increased by 19–79%.
Land Price Hike in Other Cities
According to the report, Mumbai Metropolitan Area (MMR) and Pune are the markets to keep an eye on as prices have increased by 20% to 70%. In contrast, the inventory backlog decreased to an annual and seasonal low of 12 to 20 months. The total ready inventory for Mumbai and Pune is one of the lowest, which is 4-5% and in sync with the best-performing regions, Gurgaon and Hyderabad.
Land costs in Bengaluru have also soared as compared to before the epidemic. Residential prices have risen from Rs. 5,000 per square foot to Rs. 10,000 per square foot, while the value of apartments and plot developments has increased from Rs. 2,000 per square foot to Rs. 4,000 per square foot. Land prices in Bengaluru’s CBD (Central Business District) are at a record-breaking peak. The number of land transactions here has remained the same due to price hikes.
According to reports, within the first nine months of 2022, the leading 8 cities witnessed at least 68 additional land purchases comprising 1,656 acres. Merely 20 land sales comprising 925 acres were completed in this period last year in all of these cities.
Gurgaon and Dwarka Expressway Land in High Demand
In Gurgaon, land costs have risen to Rs 1.25 lakh per square yard from between Rs 30,000 and Rs 40,000. It has also been reflected in Gurgaon’s apartment sale prices. With offices now running at full scale, the demand for rented properties is rising, leading to high rent prices.
Compared to the price per square foot before the epidemic, new launches in Gurgaon’s Golf Course Road Extension are priced between Rs. 17,000 and Rs. 23,000. However, on the Dwarka Expressway, selling rates have risen to Rs. 12,000–14,000 per square foot from Rs 3,000–4,000 previously.
Real estate developers concur that rising prices result from the expansion of residential markets. Post-covid, there has been a global pattern of increasing land values, mainly attributable to better sales volume, higher sales price recovery, and better infrastructure and connection. Lack of land parcels with clear ownership and fewer regulations are other factors contributing to the increase in land prices.
For instance, the land price along the Dwarka Expressway has jumped by 50%. Why? Because of the increased attitude and end-user demand for high-quality residential units across numerous micro markets, developers raised their project’s sales prices. The other factor was due to rising land and building costs. Some ongoing projects in Gurgaon have seen price rises of 10%.
Hyderabad Real Estate Sector Sees an Upward Growth
Along with prices, Hyderabad is experiencing premium residential growth in a way that has never been witnessed before. The unit sizes are expanding in Hyderabad. The largest available unit before Covid was 2-BHK at 1,200 square feet and 3-BHK at 1,800 square feet, with the largest at 2,400 square feet. In addition to launching exclusive single homes on every floor of high-rise complexes, developers are now introducing residences between 7,000 and 10,000 square feet.
Hyderabad, in contrast to Gurgaon, where the government controls the provision of land, has better infrastructure and a good availability of land. Whereas, in Gurgaon, land has value only if you obtain a permit for development.
In a Nutshell
The real estate market in Gurgaon and its micro-markets experienced outstanding growth in 2022, putting it at the pinnacle of the NCR real estate hotspots, according to a renowned Gurgaon-based developer. Land prices are rising in Gurgaon and Hyderabad due to the faster-growing demand for dwellings.
Following the epidemic, individuals have begun placing a higher priority on home ownership, driving the growth of new residential developments and the interest in plots.
