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The Flop Kokapet Auction - HUDA Needs To Come To Reality
Posted by Pradeep Sadanapalli | December 24, 2007 | 297 views
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Loading ...The flop Kokapet land auction shows that nobody is in a huge rush to buy land at exorbitant prices, says IPSITA BHATTACHARYA I.
Land prices may be multiplying by the day, but the demand for property doesn’t seem to be as crazy, as the Hyderabad Urban Development Authority discovered recently. Their initiative of auctioning 100 acres of land in Kokapet received a poor response.
A plot of 25 acres was sold for Rs 12.01 crore per acre, while the other three found no takers. Off the record many developers say there are no buyers.
Is there a slump in the real estate market? Says Jayesh Ranjan, vice chairman of HUDA, “We have also realised that places like Kokapet and Miyapur are more suitable for commercial purposes and 25 acres is not enough for commercial purpose. Moreover, in Hyderabad there is a rule that 40 per cent of land must be left for roads, pavements etc. We have got discreet enquiries from reputed builders whether we will be able to offer larger land. So I see no reason to be pessimistic,” he adds.
But Kiran Raju, MD, SA Habitat, disagrees. He feels there is a discrepancy in the supply and demand of real estate projects.
“The way things are going now, in the next couple of years, the supply will far exceed the demand. Therefore naturally, most people will prefer to stay away from high priced properties,” he says. “Unlike some years back, when people would just invest in land to reap short-term benefits, they are investing in property now only if they are planning to use the place,” he points out.
Even if someone wants to invest in property, litigation issues make them back off. Sumit Sen, director of marketing, Prajay Engineers Ltd., says, “I think most people are afraid of the litigation problem. Last year in the Kokapet area, large chunks of land were auctioned for nearly Rs 15 crore. But later, these people who had made a successful bid did not get the land because of some litigation trouble,” he recalls. “Also, it is not easy to buy 25 acres of land as a high amount is involved,” he adds.
Exorbitant land prices are also putting many off. Says Jaiveer Reddy, MD Ashok Builders and Developers and vice president, Builder’s forum, “Rs 12 crore per acre is too high a price. This will only result in expensive apartments which not everyone can afford.”
The price must be kept under check, otherwise there will be no takers for these lands, he cautions.
Unaffordable price tags, litigation headaches and availability of land are proving to be a terrible combination which is scaring potential investors off.
SOURCES:
Deccan Chronicle
Topics: Govt Failures, Real Estate |
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