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Lucknow a real estate hot spot for investors

LUCKNOW, of late, seems to have become a hot real estate destination. The property boom is drawing not only big private developers/colonizers but also individuals from New Delhi. Meerut, Allahabad, Kanpur, Bareilly and Gorakhpur, who are vying to own a piece of plot in the State capital. No wonder the cash registers at the LDA have been continuously ringing ever since it announced the launch of its housing scheme in Gomti Nagar Extension on June 5.

india Updated: Jun 13, 2006 01:22 IST

LUCKNOW, of late, seems to have become a hot real estate destination. The property boom is drawing not only big private developers/colonizers but also individuals from New Delhi. Meerut, Allahabad, Kanpur, Bareilly and Gorakhpur, who are vying to own a piece of plot in the State capital.  

No wonder the cash registers at the LDA have been continuously ringing ever since it announced the launch of its housing scheme in Gomti Nagar Extension on June 5. The initial response has even taken the LDA officials by surprise. The development agency has sold 8,611 forms for its Vibhor and Vinayak Khand scheme in just about a week’s time.

And those queuing up before the booking counters are not all Lucknowites. In fact, in some places, banks authorised by the LDA to sell its registration forms are getting a better response in New Delhi and other cities than those opened in the city. “The Punjab National Bank, for instance, has already sold 600 forms in the country’s capital followed by 300 in Kanpur, 80 in Bareilly, 75 in Allahabad and 60 in Gorakhpur,” said an LDA official. The figure is expected to multiply several times over considering that the last date for applying under the housing scheme is July 5. “We had got only 13,000 registration forms printed. At this rate, we will have to place a fresh order very soon,” said another LDA official.

“The trend, as far as individual applicants are concerned, began a couple of months ago,” says LDA vice chairman BB Singh adding, the civic agency for the first time received 1,742 applications for a plot from New Delhi for its Vyom Khand scheme. Singh, however, maintains that there has never been a dull moment throughout the year and LDA plots have been selling like hot cakes. “At a time when there was a property slump in other development authorities, LDA was the only agency in the entire State to have developed and allotted over 2,500 new plots in a year,” he points out.  

Market analysts say that real estate prices in Lucknow started spiralling when a flood of Delhi-based builders mainly Omaxe Constructions, Parasvnath Builders, Plumeria, Rohtas, Unitech and Ansal Housing announced plans to develop prime properties in the city during August 2005.

From January 2004 to August 2005, the average prices both for residential and commercial properties in Lucknow were stagnant at around 15 per cent. During the past 11 months, the average property prices of plots for residential property have shot up by 20 per cent while the prices of plots for commercial properties in Lucknow’s upmarket Gomti Nagar have gone up by nearly 45 per cent, says Manish Khemka of  “Investmania”, a brokerage house in the city. As regards the profile of buyers who are interested in the upcoming properties in Lucknow, about 40 per cent are speculators, investors (30 per cent) and real buyers (30 per cent).

Khemka says the recent stock market crash has had no impact on the spiralling property prices in Lucknow as the city’s speculators are betting on property prices which are likely to harden up further in the next two years. As regards the future, Lucknow’s real estate market would witness an unholy price war as smaller builders have also started scouting for prime land in the city’s outskirts.