Patna real estate: A Journey
Patna real estate has always been in the news for new regulations introduced by state government time to time or due to the deals that paint it in black and white. Patna real estate contributes large percentage of the SGDP (state gross domestic product) and has been the second largest employment generating sector in Bihar after the agriculture. As per experts, Patna real estate is expected to grow 30 per cent over the present decade.
Till 80’s Historically, Patna’s real estate deals involved purchase of land by the customer for end use purpose. These transactions were mainly facilitated through references of customer’s family members & friends or in certain cases by real estate agents. Average Family size during that period was 7–8 and that was popularly known as the “Joint Family” concept. In mid-80’s with the completion of Gandhi Setu Bridge over Ganga, apartments were introduced in Patna real estate, such as Ganga apartment, Yamuna apartments, Udaygiri apartments to name a few.
The rate of urbanization was increasing in Patna from the start of mid 80s and it led to the demand for living spaces. Between 1980–2000 the demand supply mechanics started playing an important role in the Patna real estate sector. Scarcity of usable Land (due to infrastructural limitations like roads; hospitals, schools etc;) was felt by the stakeholders of the sector. That also ignited a sense of importance of the Patna real estate sector. People started shifting focus to Patna real estate after analyzing the potential of the sector. Along with the customers for end use, now investors (specially in late 90s) also joined the Patna real estate. Growing population and more importantly the shift towards Urbanization played a major role in increasing the demand of properties in Patna, particularly flats in Patna.
In the period between, 2000–2010 as the concept of nuclear family was on the rise in Patna, the demand for residential spaces increased proportionately. Channel Partners or Agents were getting considered as predominant stakeholders in Patna real estate. Newspapers and Radio were flooded with property advertisements in Patna real estate. Many prominent players in Patna real estate were seen sponsoring events to gain visibility. The Middle class in Patna now had rising disposable income. Prices in all Residential segments increased, both lands and flats. Developers and builders in Patna complimented the growth by offering products for all segments, from affordable to marvelous buildings and apartments.
The project finance in the Patna real estate was predominantly done through Sales, Bank & Private Lending. RBI policies of Lower interest rates and Tax incentives on Interest on home loans were the cherry on the cake. It was a Bull Run for the Patna real estate till 2011. Then suddenly the growth of Patna took a halt. The demand for Residential / Commercial spaces started falling and the local issues of non-compliant by builders of building by-laws too played its role in posting fears in minds of buyers. In the period between 2011–2021 Patna real estate at best crawled due to several uncertainties introduced by local and national laws like demonetization, RERA, new building by-laws, etc.
Now post covid Patna real estate is poised to be back with a bang. With the continuous development of social and infrastructural development within the state and specially in and around Patna, the demand for residential and commercial spaces have begun to build up. The customer segment again will be a mix of end users and investors. People are attracted towards the sector as it witnesses strong capital appreciation in comparison to other mode of investments. The new real estate customer in Patna will not only rely on the estimates of the Channel Partners and agents but will also do their own research based on the internet. And the experts suggest that online platform will grow exponentially in the coming years in Patna real estate.
About 40% of Population of Bihar is under the bracket of 15–35 age, which is a very positive sign for Patna real estate. The demand for residential spaces and investment in land in Patna is going to be on the rise due to the young population and subsequent growth in disposable income. The demand & supply gap is still huge which continues to create the opportunity for all stake holders to be a part of the Patna real estate. We can witness further investments from Foreign Investors and Private Equity players in the future in Patna real estate. With the demand of this sector coupled with the Growth Road map of the Patna, Patna real estate will grow leaps and bounds in the coming decade.
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