Ten-Fold Increase in Land Prices in Tier-II Cities

Bangalore: Over the last seven years, secondary cities across Karnataka have witnessed ten-time increase in property prices. Properties in these tier-II cities in the state of Karnataka are like a hot cake from which developers and buyers want to have a profitable bite.

The secondary cities or tier-II cities in the state of Karnataka are observing healthy real estate movement as both developers and potential home buyers are showing more interest in such places. Some of the most preferred destinations are Belgaum, Mangalore, Mysore, Hubli-Dharwad, Shimoga, Gulbarga and Davanagere, reports Manu Aiyappa of TNN.

According to the department of stamps and registration record, over the last three years, the real estate prices have skyrocketed in cities like Belgaum, Hubli-Dharwad, Mysore, Mangalore and Gulbarga. Therefore, home buyers as well as developers are now seeking spaces in far flung areas where property prices are still affordable compared to cities.

For instance, in cities, an average two-bedroom apartment of 1000 square feet may cost around 30 lakh, whereas, the same apartment can cost 25 lakh in the far-flung areas. Similarly, the rental amount has also made an upward shift over the past six to seven years, said city-based realtors.

Despite volatile real estate market, slow economy, high inflation and soaring interest rates, these secondary cities have observed healthy price appreciation.

"Yes, the real estate business is on the upswing and we are expecting things to get only better in the coming years," said Ramesh Shahbad, a realtor in Hubli-Dharwad, reports TOI.

The hikes in land prices in these cities are mainly due to the availability of social and physical infrastructure, according to V Govindaraju, a senior officer, Stamp and Registration department. Moreover, government has come up with initiative to offer better connectivity and sanitation.

Raghavendra Rao, a member of the Real Estate Developers' Organisation in Davanagere, said that "The real estate businessmen have created an artificial scarcity of land thereby making it costlier. The working class, at current rates, cannot afford to buy a plot of land or build a house even if they invested their entire life savings," reports TOI.