Thursday, March 17, 2011

THE COST OF UNDERDEVELOPMENT

Lack of modern urban dwelling centres is hitting real estate price

During my recent trip to Bhubaneswar, I was pretty intrigued by the manner in which the city has come in the last one decade. With construction in full swing all around, the change is only too visible. Amidst the development, what startled me was the fact that the average price of the real estate in Bhubaneswar is more than that in the national capital region (NCR). Perhaps there is still some rationale behind the high real estate prices in the NCR, but what could it be in the case of Bhubaneswar? I could not see any, especially when I found out that the prices were higher in the capital of the impoverished state as compared to the prices in the national capital region. A brief analysis of how the real estate prices in Bhubaneswar have seen a considerable rise over the past few years. Obviously, one of the reasons for this unprecedented is the city’s expanding population, compounded with large scale migration that is taking place. Also there is this popular tradition among the Oriyas to have a property in Bhubaneswar, no matter in which part of the world they live in! It is a sort of status symbol amongst the Oriyas. But then, the real reason behind the increase in price is also the lack of alternatives available to the people. In most of the areas of the state capital, the price of real estate has surged by a whopping 300 per cent in last few years and on an average the price has increased by 100 per cent in the last five years for residential units. At Nanadan Kanana Road in the city, the price of real estate is around Rs 23,537/sq ft!

One of the major bottlenecks with the state’s urban development is the lack of urban dwelling centres in the state. While Bhubaneswar is becoming a commercially viable option and is providing huge investment opportunities, the government has failed to replicate similar model of development in other parts of the state. Not only Bhubaneswar is experiencing huge migration but is also experiencing jamming of real estate. Simply because the second most developed city of the state, Cuttack, is considered too congested and lacking urban infrastructure and commercial viability to support the real estate attraction.

The phenomenon is not confined to Bhubaneswar alone. A similar trend can be seen in Patna too. The real estate prices have gone up by more than 100 per cent in the last three years with residential properties being priced at around Rs 3,000-3,500/ sq ft. Even in Guwahati in Assam, the prices have seen a relative steeper rise as compared to neighbouring areas. These cities or rather states, have not only missed out opportunity in terms of providing their people with multiple choice of modern urban dwelling but also have seen high opportunity cost in terms of trade and commerce. Contrast these states with Madhya Pradesh where Bhopal and Indore equally share the burden, or with Gujarat where Ahmedabad, Surat, Rajkot and Vadodara are almost equally developed.

It is almost an imperative to develop a number of satellite townships near state capitals and to build peripheral infrastructure around the existing cities in order to check on property prices and reduce jamming of the real estate. Such modern and intelligent urban planning would necessarily provide the citizens with multiple options of commerce and residence and thus ensure that just one city in the state does not have to pay for the underdevelopment of the entire state. One should take a cue from states like Gujarat.



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4 comments:

  1. This comment has been removed by the author.

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  2. I think, cost do not have main thing that you are reaching to buy affordable property in Bhopal.
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  3. In Bhubaneswar residential as well as commercial properties are growing very fast for fulfilling the population of the city. Thanks for making such a informative blog. Keep updates...bhubaneswarproperty.in

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  4. Great post. This has really very useful information. Thank you for sharing.

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