Curation Team
MYSURU: Base price of sites in the upscale locality of Vijayanagar Stage IV, Phase II, fixed by the Mysuru Development Authority (MDA), has directly impacted property prices in west Mysuru, negatively impacting the real estate sector, say developers.
Inflated prices have created a bubble, creating a false impression of a boom in the realty sector.
While MDA originally quoted a base price of Rs 8,000 per square foot for premium corner plots, this was hiked three times subsequently to set a new benchmark, prompting other property owners in tony layouts – comprising around 18,000 sites – to follow suit.
A property owner has advertised the sale of a commercial plot of 2,400 sq ft in the same locality for Rs 3.7 crore, which translates into a whopping Rs 15,500 per sq ft. Another seller of a 20×30 ft duplex house has quoted Rs 1 crore, at approximately Rs 9,500 k per sq ft.
Srihari D, the president of the Mysuru chapter of Confederation of Real Estate Developers’ Associations of India (CREDAI), told TOI the recent auctioning of sites by MDA has impacted real estate prices in the locality – both residential and commercial units.
Srihari said as a developer he would investigate this sudden uptick in prices. If a plot is priced at Rs 3.7 crore, the buyer will have to pay 8% stamp duty on that and then invest a minimum of Rs 1.2 crore for construction. After shelling out such a huge amount, the buyer’s return on investment through rent earnings will always be in doubt, he added.
Another developer, Abhishek Hegde, said rent for a ground floor commercial plot in the heart of Mysuru city is around Rs 60 per sq ft, with the price reducing for first and second-floor spaces.
For the record, a commercial property owner can earn around Rs 1.2 lakh monthly on an average by renting out 2,000 sq ft of space, with an average return on total investment around 5%.
