C.J. Punnathara

Kochi, May 30

THE controversy generated by the Smart City project in Kochi has eroded real estate prices in and around the project site considerably.

"Land prices which were quoting Rs 35,000-40,000 for a cent a year ago has been knocked down by close to 25 per cent to Rs 25,000-30,000," a big-time real estate dealer who had bought 50 acres of flat garden land in the project vicinity over a decade ago said.

"The political controversy over the project and firm announcement that the Government would acquire only 236 acres of fresh land in the first phase have bridled real estate prices. Unlike the political statements, the real estate prices in the area are nowhere around Rs 1 lakh a cent," Mr P. Vibhuraj, a real estate agent in the area, said.

Dr T.J. Rajan, a Kochi-based doctor is negotiating with a couple of people for selling his one-acre level garden land, close to the project site for over Rs 30,000 for a cent. "Talk of land prices shooting up to Rs 1 lakh for a cent is a myth," he said.

While land transactions are registered at a fraction of their actual prices, sources at the Puthenkuruz Sub-Registrar's office, under whose jurisdiction bulk of the proposed project site falls, said there has been a substantial increase in the number of transactions this year. Most of the project land falls under the jurisdiction of the Puthekuruz Sub- Registrar office and the remaining under Thrikkakara.

"Though land prices here have appreciated handsomely in the recent past, it still continues to be relatively low, given that the first phase of the project calls for an investment of Rs 1,500 crore. There has not been any spectacular spurt in prices and the real estate dealers are still holding back, not making any firm commitment," Mr Narayanan Nair, a land deed writer at Puthekuruz said.

A few people have burnt their fingers by paying advance for land and waiting for the land to appreciate in value, which never materialised.

Now they have forsaken their advances, Mr Narayanan Nair said. Only a few like the real estate dealer who acquired 50 acres in early nineties have made money.

He sold a portion of his land during the peak prices of last year, at over a 10 times the cost price. And he has still got more land to sell.

(This article was published in the Business Line print edition dated May 31, 2005)
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