Indian Real Estate: Property Boom

Published: 23rd February 2006
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Source: Times News Network / Economic Times

Punjab Real Estate: Farmer's Delight

Malwa, that part of Punjab, never a favourite with real estate investor or developer, is now witness to a property boom, the likes of which has sent property prices in the region boomeranging skywards, as realtors and buyers alike, swarm into the region like a cloud of greedy locusts with damage on their minds.

Property prices might have been climbing higher since a year or two, yet the cost of agricultural land has experienced a sudden escalation of 200 to 25%, all within the span of the last six months. A year back, the average price of land in Bathinda, Faridkot, Ferozepur, Muktsar and Moga used to be between Rs. 2 to 3-lakhs, today it is hovering around the Rs. 8-lakh mark, and thereabouts.

According to property dealers, the state wide boom across Apna Punjab is responsible for fuelling the price hike in the Malwa region, along with other factors responsible for boosting the demand for land. Economist of note, Dr. Sucha Singh Gill believes the unprecedented hike is due to low interest rates on bank loans, the need to whitewash black money, and improving trade relations between Pakistan and India.

As bank interest rates on loans are lower than the national rate of inflation, depositors are not interested in accruing bank savings, preferring instead to invest in real estate. As well, property investment seems to be an ideal way to get rid of all that hidden black money. Then too, increasing trade with Pakistan has led a number of big traders to purchase land along the GT Road, Gill informs us.

As farmers along the Grand Trunk road and the cities peripheral areas sell their land for upwards of Rs. 2-crores an acre, the majority of them prefer to re-purchase agricultural land, as they rush off to the Malwa region with its still cheap land, much more so than in other parts of Apna Punjab. This has led to land prices climbing steadily in the area, with many buyers mostly farmers from Amritsar, Jullunder, Ludhiana and Chandigarh.

Also, the development of planned land colonies, a considerable rarity in this area is another of the reasons, why land prices are beginning to soar here. Not only sellers but banks are also benefiting from this new phenomenon, as it has led to an excellent recovery of loans from farmers, since before selling land, they have to clear all encumbrances on it.

It does make one hope rising land prices will help put an end to the number of farmers committing suicide in Punjab. A welcome solution, yet, it leaves another problem, that of diminishing agricultural land. If colonisers and developers continue to snap up land meant for growing food crops and construct luxury homes, apartments, second homes, third homes, investment homes, will there be any land left to grow food for India's burgeoning masses?

A prospect that sends shivers down the spine bringing to mind the days when the British denuded India of its flora and fauna by shooting hundreds of tigers a day, amongst other big game hunting, and cutting down its rich forests of teak, mahogany, rosewood, sal, etc.

One cannot blame the debt ridden poor farmer whom the government or the people are doing little to help, but one can put a stop to the avaricious developers and colonisers as they rapaciously buy up agricultural land for the rich, who have more homes to spare than needed. For of course, the cost of a bungalow or flat in these planned new colonies is beyond the reach of the common man. Despite, the huge supply of houses, there is No House for Mr. Biswas!

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