Giants of the Mumbai real estate market head to Ayodhya as prices rise 179% following the Ram Mandir ceremony.

Mumbai Developers Target Ayodhya Amidst Surging Property Values

With the inauguration of Ram Lala in Ayodhya, significant real estate entities from Mumbai are actively pursuing land acquisitions in the city. Reputable sources indicate that prominent developers like Oberoi Realty, Godrej Properties, Runwal Group, and the Hiranandani Group have secured substantial land parcels within the last few months.

Property Values Surge

An online real estate portal indicates that property prices in Ayodhya have increased by 179% subsequent to Prime Minister Narendra Modi’s Pran Pratishthan ceremony on January 22. Teams from Mumbai-based development firms are currently exploring further land opportunities and establishing local business development operations. These firms are primarily focusing on land plotting and sales, residential township projects, and the development of commercial and hospitality businesses.

Hospitality Sector Expansion

According to Dr. Adv. Harshul Savla, managing partner of M Realty, Ayodhya has a limited supply of hotel rooms, with only 590 rooms available across 17 hotels. Plans are underway to develop 73 new hotels, with 40 currently in progress. OYO intends to add 1,000 rooms, while Marriott International and IHCL have already finalized hotel agreements. "Given the substantial potential for hospitality, it is not unexpected that developers are deploying teams on a land acquisition venture," Dr. Savla stated.

Increase in Property Prices

Since the Ram Mandir opened on January 23, average property values in Ayodhya have seen a 179% increase over the past three months. The average price per square foot in Ayodhya rose from Rs 3,174 in October 2023 to Rs 8,877 in January 2024, according to the real estate portal.

ANAROCK Group reports that land values, which previously ranged from Rs 1,000 to Rs 2,000 per square foot in 2019, are now between Rs 4,000 and Rs 6,000 per square foot.

Real estate near Ram Mandir now commands prices from Rs 10,000 to Rs 15,000 per square foot, a notable increase from the earlier Rs 2,000 to Rs 3,000. Properties situated 6 to 15 km from the temple are now valued between Rs 4,000 and Rs 9,000 per square foot.

Commercial and Luxury Developments

Local real estate experts note an increased demand for commercial land. The Abhinandan Lodha group is developing Sarayu, a seven-star mixed-use luxury enclave. Sudhakar Srivastava, a local hotelier, was approached by a Mumbai team for a land parcel in the same area. Moreover, it is reported that Bollywood star Amitabh Bachchan acquired a 10,000-square-foot plot for approximately Rs 14.5 crore.

Affordability Concerns for Locals

Srivastava mentioned showing some sites to a developer group from Mumbai. "They showed interest in a 640-square-foot land parcel near the Abhinandan Lodha group site... However," Srivastava told FPJ, "the developer is not very happy with the price and wants 1000 Biswas."

Srivastava indicated that the cost is about Rs 10 lakhs per biwa, which was previously available for Rs 2-3 lakhs. Despite land availability, a source reports that local farmers and agents are artificially inflating prices due to the heightened demand from major players. "They are projecting a scenario of supply and demand."

Srivastava also noted that the entry of real estate firms from Mumbai, NCR, Gujarat, and other regions has made property unaffordable for local residents in parts of Ayodhya. Anuj Puri, Chairman of ANAROCK Group, stated, "There is increasing demand from both locals and external investors."

Increase in Property Registrations

Following the 2019 Supreme Court ruling and the temple’s opening, Ayodhya has seen an increase in property registrations. Data from the Ayodhya district’s Stamp and Registration Department reveals a 120% increase in property registrations between 2017 and 2022.