The real estate sector plays a significant role in the economy: it is second only to agriculture in terms of employment generation in Bihar and substantially contributes to the state gross domestic product. The construction sector has also been responsible for the development of over 250 ancillary industries such as cement, steel, paints, brick, timber, building materials, etc in our country. A study by a credit rating agency ICRA shows that the construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. A unit increase in expenditure in the real estate sector can generate a fivefold increase in income of the people of Bihar. But it seems that the development is a not a word in the dictionary of political class of Bihar. Since two year now the Patna real estate faces stagnation due to non decisions from all concerned parties of Patna real estate market.
The true test of the professionalism in the Patna real estate sector has to be seen now; once the drama of bye laws and master plan ends. In the past a seller’s market existed, in which it was only necessary to market products or think about what kind of products to make. But now the market has perceptibly shifted towards the buyer and products must be designed to respond to market requirements. Because the demand in the affordable housing segment is encouraging, real estate developers in Patna now need to concentrate on profits through high-volume, low margin deals instead of high-margin and high-quality transactions. This will mean designing affordable housing options suited to average Bihari families whose disposable income is steadily on the rise.
Far-flung suburban locations in Patna like Sampatchak, Jaganpura, Khagaul etc., where land was relatively inexpensive, have witnessed the launch of aggressively priced projects in the recent past in Patna real estate. With a huge latent demand for housing units in Bihar, the residential sector is a strong driver to lead the recovery in the real estate market in Patna in terms of sales volume and asset pricing.
As far as the commercial segment is concerned, Patna real estate is yet to take off. Few malls and one two corporate parks like Sai Corporate Park and Surya Nest build’s business park. Rest of the commercial segment looks adhoc and not really planned.
A lot of action will unfold in the coming 10years in Patna real estate. A facilitator role by the government will go a long way in developing Patna real estate.
The second home buyer or investor in Patna normally falls into the dilemma when it comes to investing in land in Patna or an apartment in Patna. Both the investments in Patna have some merits and demerits, but there are a few important points that can help an investor in Patna arrive at a definite stand.
Buying an independent land in Patna means sovereign choice to build a house depending on one’s own requirement and constraints. On the other hand, a flat apartment in Patna is a redesigned, multi-floored construction. The apartment buyer in Patna has lack of freedom to change the shape and size of the construction area. However, it benefits the buyer in matters related to security, accessibility and location advantages.
A comparison between Land Vs Flat investment’s benefits and weaknesses
||Depends on locality, size and availability of space
||Depends on locality, services, accessibility, size, design and developer’s brand
||With space availability vanishing quickly in Patna, it is expected to appreciate very quickly. Flexibility of option to build as per future requirement helps the cost of land and property to increases very fast.
||A flat has a limited life span, so its value has a diminishing effect. After a certain period of time, there is stagnancy in the growth. Lack of flexibility in use, modification and expansion are hindrance to a quicker growth versus land
||The land is prone to litigations and it is very difficult to come out of it once anyone is involved.
||The delay in possession by developer in Patna is one of the most common problems. Quality is often compromised by the developer to control the cost and meet the deadline so the life of flats gets reduced.
||The buyer has limited options to leverage its financial position for buying a land property as banks usually doesn’t provide finance for buying a land/plot.
||It’s very easy to take a bank loan for buying a flat in Patna.
|Regular Income Source/Rental Income
||Land generates a very low income if rented and sometimes it is difficult to reoccupy the land if the tenant pushes the property into litigation
||Flats are ready to generate handsome income from the first day of taking the possession if it is given on rent. There is less chances of litigation with modern laws in place.
|Liquidity and future prospect
||Land is always in great demand. The value normally appreciates immediately due to zero depreciation on land.
||The depreciation on construction reduces the growth rate, therefore its value grows with a diminishing rate.
No doubt a land has an advantage of assured returns, but it usually needs investment in full and there is no choice of taking leverage on the fund hence overall return is limited up to some level. Flats are very easy to buy and an investor can take leverage on its fund, in conclusion the return is also very good. The possession delay by the builder is a major concern in case of flat investment in Patna. Another big problem could be strengthening interest burden while one invests in multiple flats in Patna on a leveraged financial position at a time of slow-down in economy, however, the land investor doesn’t need to worry in such a situation.
To judge the best investment avenue between a land and flat in Patna, one should first focus on one’s own requirements. If the investor wants to use the property in Patna for his personal use, then land could offer an advantage of usage flexibility and handsome value appreciation in long term. However, if the investor wants to resell the property in Patna after a short period then it is more profitable to take a position in flats in Patna. As an investor is not required to hold the flat for a long term, it also eliminates the depreciation factor. If the investor is a senior citizen or someone who cannot devote much time to maintain the property in Patna then again it is advisable to take the choice of a flat over land.
Each household in Patna district has 6 members on average. Patna district has a population of 60 lakhs and about 10 lakhs houses. The density of population is almost 1900 per sq km. The decadal growth rate would be around 20%. Patna master plan for 2031 is therefore to accommodate and facilitate the living of 85 lakhs people at present rate of growth of Patna district. More prudent planning will be for 1 crore as the speed of urbanization in Bihar would increase in coming decades. Patna will be the epicenter of this urbanization.
A smart city of 10 million people!!! Any town planner would need really to think out of box to transform an extended village into a smart city of 10 million people in 16 years. The town planners can remind themselves of Singapore converted from a village to an exemplary city in just two decades. Is it possible in Patna…… Nothing is IMPOSSIBLE. What Patna requires is a PIED PIPER. Remember; the story of PIED PIPER of Hamelin which we read as a child.
Buy Sell Rent Patna
Patna real estate needs PIED which symbolizes Planning, Ideas, Execution & Destination. The Piper stands for a leader focused on world class urbanization of Patna. Urbanization in Patna needs a team which can think 360 degree and is visionary enough to foresee the coming decades of urbanization in Patna. The present lot of planners and executioners are a SORRY lot to say the least.
Though Patna real estate is waiting to see the Patna Master Plan in its final form, one thing is sure there will be nothing “master” about that master plan of Patna. Patna’s real estate waiting for the PIED PIPER will continue…….
We just do not care!! We are Biharis….. How long we will continue with the same mind set. We need to learn accountability and responsibility. Really two big words; which we are not at all aware. Gandhi Maidan is the centrally located field which can manifest the beauty of the state capital many a times but it comes to news only for RAVANA reasons. Gol Ghar another pride of Patna at a stone throw away distance from Gandhi Maidan is another story of neglect.
We cannot preserve or better say maintain our present proud to be STRUCTURES. To add to the woes we get on to build NEW STRUCTURES. An example is the NEW MUSEUM besides High Court on Bailey Road. Just imagine how many old, beautiful structures would have got LIFE if the same money was diverted to re- establish their last glory. We are not against building NEW Structures, contrarily, we favor them but the question is at what cost.
A similar example is the NEW NALANDA UNIVERSITY, which is getting started in remembrance of the older Nalanda University of international fame. Good that we are planning to build a NEW one but what about all the universities which are ailing in the state from last so many decades. Elementary education is suffering all over the state, and we are building a university for international students? The University of International Standards
Real estate Patna
is good but what about other education standards in the state. Remember we spend the more than 20% of funds on education in our budget.
The woes are listless in my state and one single window for all these woes is that all the departments of the state is SPENDING departments and not a single one an EARNING department. Here we need to learn the two words accountability and responsibility.
If we are building a NEW MUSEUM at a certain cost; how much revenue will it fetch for us, when will we break even and where will be the revenues earned from it utilized apart from the maintenance of the premise from where we are earning. Will the revenues be used to maintain and update other historical monuments in Patna? Is the financial accountability and responsibility assigned? Unfortunately the answer remains; NO. This is an example. All of us can make a long list.
The two words; ACCOUNTABILITY & RESPONSIBILITY should form the base of all activities; profitable or non-profitable; in the state. These two keywords can only optimize the engine of our state; Bihar.