The festive season has failed to bring cheer to the real estate sector in Indore due to a combination of high property prices and a subdued economy.
Real estate developers are facing problems as inventories pile up and there are few takers.
The builders have been unable to reduce prices, ostensibly due to high construction costs as a result of which, several projects in the city, particularly on the outskirts, have slowed down.
‘High guideline rates hampering growth of real estate sector’
“The property market in Indore has failed to pick up this festive season and hopefully, the scenario will change by Diwali. High guideline rates and other factors are hampering the growth of the real estate sector,” Indore Property Brokers Association president Rajendra Bhaiyya said.
With property prices in the main localities of the city ruling sky high and land in short supply, there is greater development in the outskirts of the city along the Ring Road, Bypass Road and the Super Corridor.
As compared to a rate of Rs 10,000- 12,000 per square feet in the city, the land prices in the outskirts are around Rs 1,000-3,000 per square feet.
“Other than Ring Road, the other localities are yet to develop fully. It will take a long time for the Super Corridor to develop,” Rajendra Bhaiyya said.
Pace of development in under-construction townships slows
While people have started settling down in some residential townships, the pace of development in some under-construction townships has slowed. However, property consultants say that many developers have funds but are delaying the projects.
“For now, there are only end users and investors are shying away from the market,” property consultant Pratik Gandhi said.
The Indore chapter of country’s largest real estate body, CREDAI, is also unhappy with the guideline rates for fixing of the land prices as fixed by the district administration.
The body wants that an average of land prices prevailing in a particular area during April-December must be taken, and that the guideline rates should be fixed on that basis only.