Housing prices in tier II cities drop

- May 29, 2007
Though there has been heavy building activity in these areas, and the prices were high too, real estate prices have seen a downward spiral lately. Ahmedabad seems to be the only city where prices are still holding strong.

Chandigarh/ Tri-city region
Residential land prices continue to fall sharply in the tri-city region. Prices in Mohali have fallen 15-20 per cent over the past six months. In Panchkula too, prices have dipped from the Rs 25,000 per square yard level.

In Madhya Marg in Chandigarh though, prices have remained stable. Residential prices in Zirakpur and Derabasi have seen a slide of 20 per cent from Rs 18,000 to Rs 15,000 a sq yard. Investors are out to sell in the market and residential plot prices are expected to weaken further in the next six months.

Lucknow
Gomti Nagar, where a number of townships are being developed has seen a significant slow down. Projects by Omaxe, Eldeco and Parsvanath are coming up here and quoted values of up to Rs 2,200 per sq ft but are now down to an average of Rs 1900 per sq ft.

Aligang too is now at Rs 1,500-1,700 per sq ft - the area was quoting Rs 1,800 per sq ft in January this year. The Shahara Group recently launched their township in Hardoi, on the outskirts of Lucknow, but demand has not taken off.

Jaipur
The Jaipur-Ajmer Road has seen a slight fall in prices. Residential prices were at Rs 1,900 per sq ft. Today apartments are selling at Rs 1,700-1,800 per sq ft and investors who picked up properties in townships here are willing to sell at Rs 1,500-1,600 per sq ft.

Another important development - the new housing schemes launched by local developers along the same road (close to the Mahindra SEZ) are priced lower at Rs 1,300 per sq ft. Towards the south east in Jagatpura too prices of group housing plots have fallen to Rs 11,000 a square yard compared to Rs 15,000 a square yard four months back.

Bhopal
Prices in Bhopal have remained stagnant over the past quarter. Land prices had touched highs of Rs 50-60 lakh on Hoshangabad Road and Kolar Road. But, consultants say investors are now stuck with land where prices have peaked, as there have been no transactions for over four months now. Residential prices on Hoshangabad had touched Rs 1,300 per sq ft six months back but are now stable at Rs 1,000 per sq ft.

Ayodhya bypass, where the city's largest township - Mrinal Residency is being developed, also witnessed sale transactions at a high of Rs 1,500 per sq ft in October last year but is now down to Rs 1,200 s per sq ft.

Indore
In Indore, apartment prices have seen some softening on the Ring Road. After touching a peak of Rs 1500 per sq ft, the quoted price today is Rs 1100 per sq ft. The MR10 region however has remained stable - due to the proposal of a flyover from here to the airport. Residential plot prices along the new bypass have seen a dip. Large townships by Omaxe and the Satya Group are underway here, while Parsvanth, DLF and Ansal have made large land investments here. Local brokers say residential plots in Omaxe city have fallen to Rs 525 per sq ft from Rs 600 per sq ft four months back.

Ahmedabad
Ahmedabad is one city where apartment prices continue to hold strong, in fact over the past six months prices have risen 12 per cent. In Vastapur and Prahlad Nagar however, land prices have seen a dip. A number or row houses and bungalows are coming up along Ring Road phase II, bordering the Sarkej Ghandi highway.
Here land prices had gone up over 50 per cent in a year but have now dropped significantly. Residential plots that were at Rs 2200 per sq ft are quoting Rs1500 -1700 per sq ft today. Ognaj, a northwest suburb where land prices were at Rs 600 per sq ft has also seen a dip by 10 per cent and the Nalsarovar area is also witnessing a similar situation.