Property prices in Punjab likely to rise by up to 20 pc

Chandigarh, Feb 8 (PTI) Property prices in Punjab arelikely to go up by up to 20 per cent, with the imposition of anew levy by the local government for approval of upcomingresidential or commercial projects in municipal areas coupledwith high input cost.

"Besides increasing input cost, the new charges imposedon residential and commercial projects (by Department of LocalGovernment) will definitely impact the property prices inPunjab...we think prices will go up by 10 to 20 per cent inthe state," Confederation of Real Estate Developers''Association of India (CREDAI-Punjab chapter), GeneralSecretary Amardeep Singh Heera told PTI here.

The Department of Local Government, Punjab, in a recentnotification imposed Processing Fee (PF), External DevelopmentCharges (EDC) and Change of Land Use (CLU) for real estateprojects falling in municipal areas across the state in orderto augment the financial resources of Urban Local Bodies(ULB).

As per the notification, the department has imposed a feeof minimum of Rs 1 lakh per acre (4,840 square yards) to themaximum of Rs 15 lakh per acre on residential projectsdepending upon areas under municipal authorities across thestate.

Maximum charges have been levied on Dera Bassi, Zirakpur,Kharar and Banur, which are situated on the periphery ofChandigarh.

According to property analysts "heaviest" charges havebeen levied upon new commercial projects starting from Rs 10lakh per acre to Rs 1.30 crore per acre. Besides, thesecharges would be enhanced by 10 per cent every year by thestate authorities.

Earlier charges between Rs 2.5 lakh to Rs 3.5 lakh peracre in the form of development fee was being charged bymunicipal councils or corporations across the state for theresidential and commercial projects, they said.

Real estate developers, which are dealing with spirallinginput costs, say the move will impact their margins.

According to developers, cement prices have shot up byRs 25 per 50 kg to Rs 275 while rates of bricks have jumped toRs 4,500 per truck from Rs 3,500 per truck three months back.

Steel prices have increased to Rs 42 per kg from Rs 30 perkg four months back.

A few developers have already started increasing therates of their projects in the state. "I have already raisedthe price of my flats (100 square yards) in Kharar from Rs 16to Rs 18 lakh and will further raise rates to Rs 21 lakh nextmonth," said a Kharar-based real estate developer.