Land prices surge in districts near Bengaluru post Covid: Experts

BENGALURU: Neighbouring districts of Bengaluru city have witnessed a sharp increase in land prices post Covid. Stakeholders say this is due to factors like reforms related to purchase of agricultural land and high demand in the housing market.

According to market experts, land prices in Bengaluru Rural, Chikkaballapura, Tumakuru , Kolar and Ramanagara have shot up significantly over the past 12-16 months.

The increase is especially seen within a 50km radius of the city.

Sriram Chitlur, co-founder and managing director of Hosachiguru, a Bengaluru-based agriculture asset management startup, said prices of agricultural and non-agricultural land close to Bengaluru have increased in the range of 10-40%. He said land close to Kempegowda International Airport (KIA) road has become far more expensive as compared to one year ago.

Anand H, a land aggregator, said land prices, which hovered in the Rs 1-2 crore per acre range until 2020, have now doubled to touch Rs 3-6 crore per acre in several villages close to the KIA road. The increase is seen in Bengaluru's north, particularly along Doddaballapura and Devanahalli stretches, he claimed.

Since the Bengaluru-Mysuru expressway holds potential, realtors are showing more interest in land parcels close to the highway, triggering a spike in prices, especially in and around Bidadi. Land has become costlier even in Magadi and Kanakapura stretches, with realtors quoting Rs 30-40 lakh per acre. Not very long ago, the same land did not have takers even for Rs 15 lakh per acre.

Land prices in Bengaluru Urban (between BBMP limits and neighbouring district) have surpassed Rs 10 crore. Some landlords in Singanayakanahalli, off Yelahanka, are said to be seeking up to Rs 12-15 crore for an acre.

Mamatha BR, inspector general, department of stamps and registration, said the number of farmland registrations in and around Bengaluru has gone up significantly over the past few months, but she is not sure about the prices rising as the registrations are done at the guidance value.

Investor interest in farmland can be attributed to two factors. First, increased demand for housing and expansion beyond ORR in all directions. Second, a major reform enacted two years ago that allowed non-agriculturists to buy farmland. Now, people increasingly want to convert cash into another land asset as they seem to have realised that land would get better returns than banks or other asset classes.

Improved rail (Metro) and road connectivity is also another reason why people are willing to go for land.

"The post-pandemic reaction to increased demand is the main reason for the rate increase. With developable land parcels in and around Bengaluru Urban fast drying up, demand for peripheral areas has increased. Also, the demand for housing is picking up at a very fast pace. The work-from-home culture is nearly dying out, and the need for dwellings has increased," said Suresh Hari, chairman of Credai Bengaluru.