Buyers are being lured by a spurt in industrial growth and commercial spaces in these areas.
Forget the urban sprawl; the demand of property located in Gram Panchayat areas has skyrocketed as investors looking for long-term returns are thronging villages in expectation. Buyers are being lured by a spurt in industrial growth and commercial spaces in these areas.
Ashwinder Raj Singh, CEO Residential Services, JLL India, while comparing the benefits of buying property in BBMP versus gram panchayat limits said, “Gram Panchayats have seen rapid development, the fact is that this development is largely opportunistic. Developers are attracted by two factors: the lower cost of land, which they or the original land owners generally get converted from agricultural to non-agricultural, and the growth prospects of such areas, which can be quite considerable.”
Because of lower land costs, property prices also tend to be low. This attracts many buyers who have budget constraints and do not mind the inherent drawbacks that projects in gram panchayat areas often have.
Limitations like the lack of basic infrastructure (schools, hospitals and grocery stores) are acting as a roadblock, but buyers are targeting areas where metro connectivity has been proposed and development is being carried out, cites JLL.
A senior official at the Devanahalli sub-registrar office said that up until 2013 they got around 18 to 20 applications for registration in a day, but since 2014 — after the state government made announcements of developing a tech park in the area – that number has gone up to almost 50 a day.
Mahantesh Gowda, a dealer registered with an affluent online property portal said, “In the past few months we have been seeing more demand for property located outside the city. The villages around Kolar have become hotspots for investment as the area is witnessing high industrial growth.” If we go by the numbers, around 35 per cent of buyers are first-time buyers willing to pay Rs25-30 lakh for a property. More than 125 to 130 plots have been bought in the past one-and-a-half years, which shows a jump of 35 per cent in the demand for property in gram panchyat areas, he added.
“The trend shows that consumers are willing to invest in such properties due to the cost escalation they expect to take place in the future.
In addition, many buyers are going for plots in the hope of building retirement homes. Also the development promises made by the state government and upcoming commercial projects has made these areas more lucrative,” said Satish BN, Executive Director Knight and Frank South India.
Meanwhile the trend shows that around 60 per cent second-time and 75 per cent third-time home buyers are investing aggressively in properties in and around villages. In addition to this around 300 plots have been sold in the unorganized sector over the two years since 2014, which is way higher than the absorption earlier, according to records available with the sub-registrar’s office.
“For investors and end-users, properties falling within gram panchayats limits can be a very lucrative opportunity. The initial investment is lower; the growth potential can be quite high if the locality is slated to be included within the municipal limits in the foreseeable future. When that happens, the quality of services will start improving rapidly and property prices will surge upwards,” said JLL’s Singh.
THE RURAL CHECKLIST
* Check if the clearance of land usage fees has been paid, or pay it. It’s around six per cent of the registration fee to convert it from agricultural land
* Check if the land complies with the layout category it falls into, and also the future development plans for the layout.
* Do check for disputed properties and while buying plots try to consult other people buying plots in the same layout.
* To have a smooth transaction ensure you have the necessary paperwork and registration papers in place. If required consult a legal expert.