When Vinod Sharma, who hails from Varanasi bought a 1350 sq ft (1 biswa) plot of land 15 years back in the city for ₹2.5 lakh just about 7 km from the Kashi Vishwanath temple, little did he know that the price of the plot would escalate to ₹50 lakh. The massive infrastructure push to the heritage town, the opening of the revamped Kashi Vishwanath Corridor in 2021 that connects the ancient Kashi Vishwanath temple to the ghats of the Ganga, infrastructure changes such as the new Ring Road and long-term projects such as the expansion of the airport runway, has had its impact on tourist footfalls and the overall economy of the city, not to mention land prices.
Fast forward to the Ayodhya consecration ceremony held a few days back. Land prices in Ayodhya are today perhaps the highest compared to other temple towns in the country, almost on par with the rates prevailing in established cities such as Noida and Greater Noida, say experts.
Alankar Gupta, a RERA-registered real estate consultant based in Ayodhya, told HT Digital that property rates in Ayodhya today are perhaps the highest compared to other temple/pilgrimage towns across the country. The average price of a residential property in Ayodhya is close to ₹5000 per sq ft and commercial property is around ₹8000 per sq ft.
Monthly rentals for a 2BHK housing unit is varying between 18,000 to ₹20,000 per month. However, with homestay options emerging, a homebuyer can easily rent one room with an attached toilet for ₹1500 per night, which works out to be around ₹45,000 for the entire month, he explains.
“Prices have skyrocketed in the city on account of the limited supply and heavy demand mismatch,” he added.
The Mumbai-headquartered real estate developer, The House of Abhinandan Lodha (HOABL), has launched around 250 plots to coincide with the Ram Mandir consecration ceremony in Ayodhya at a starting price of ₹1.72 crore for a 1,250 sq ft plot. It has invested close to ₹1200 crore majorly for a 51-acre land parcel in Ayodhya and Phase 1 of its luxury project is currently underway. Its planned development project in Ayodhya is located around 12 to 15 minutes away from the upcoming Ram Temple.
Bollywood actor Amitabh Bachchan has purchased a plot in The Sarayu, a 7-star mixed-use enclave in Ayodhya by Mumbai-based developer The House of Abhinandan Lodha (HoABL). Real estate industry sources have said that the plot where Bachchan intends to build a 10,000 square feet home that stood at ₹14.5 crore.
Approximately, 24% of the total interest in the Ayodhya project originates from NRIs in the Middle East and the US. As many as 22% buyers who have expressed interest are from the regions of Lucknow, Kanpur, and Meerut. Additionally, 35% of the interest emanates from Delhi NCR, while the remaining percentage is distributed among various locations such as Mumbai and similar areas, the company’s CEO Samujjwal Ghosh had told Hindustan Times Digital.
“This diverse interest showcases the widespread appeal and global reach of our Ayodhya project. Our strategic focus is on nationally significant infrastructure growth corridors, starting with Ayodhya in Uttar Pradesh and expanding to Vrindavan, Varanasi, and more, and this aligns with our vision to democratize land in culturally and spiritually rich areas,” he added.
The price cycle uptrend in temple towns
Places of religious interest across the country have attracted both domestic as well as international buyers. Pilgrimage centers and temple towns such as Rishikesh, Haridwar, Tirupati, Shirdi, Mathura and Vrindavan have all witnessed an upward real estate price cycle at some point. Some of these markets are viable for reasons other than religious ones as they have industrial and commercial demand drivers as well. The hospitality sector is perhaps the biggest draw thanks to the tourist footfalls.
A recent report by brokerage firm Jefferies estimates that a $10 billion makeover of Ayodhya with a new airport, revamped railway station, township and improved road connectivity will likely drive a multiplier effect with new hotels and other economic activities. It “could attract 50 million tourists a year”.
Golden Temple in Amritsar gets an estimated 30-35 million footfalls a year while Tirupati temple sees 25-30 million visits. Globally, Vatican city gets around 9 million tourists every year and Mecca in Saudi Arabia around 20 million.
“Religious tourism is still the biggest segment of tourism in India,” according to Jefferies. “Several popular religious centers attract annual tourist traffic of 10-30 million despite the existing infrastructural bottlenecks. And hence, the creation of a new religious tourist center (Ayodhya) with improved connectivity and infrastructure can create a meaningfully large economic impact.”
Who buys real estate in temple towns?
Traditionally, residential space buyers in these temple towns fall in two categories – investors from across the country seeking to cash in on rental and resale value, and genuine buyers fulfilling a long-cherished aspiration. That said, residential units in religious places tend to be a second-tier consideration among buyers, to be considered only after a primary home has been secured in the city of residence.
Real estate experts say that while the focus of investors who have put in their money in Ayodhya or Varanasi is on return on investment, asset classes that are likely to emerge in the long run could be senior living or fractional ownership.
Growth of Tier 2 and 3 towns
Religious towns also predominantly fall in the Tier II and Tier III categories. While property rates vary according to actual location and property configuration, most of the available projects in many of these towns are generally by smaller developers.
In 2022, Prime Minister Narendra Modi inaugurated the Mahakaleshwar Corridor, constructed in Madhya Pradesh’s Ujjain at a cost of ₹350 crore. Mahakal Maharaj Mandir Parisar Vistar Yojna is a plan for the expansion, beautification, and decongestion of the Mahakaleshwar temple and its adjoining area in Ujjain district.
According to Amit Goenka, MD & CEO of Nisus Finance the focus on infrastructure development within the temple complexes and the larger city has had its impact on the real estate values of the city. “The impetus on enhancing the facilities in and around the temple complex, improving connectivity to the temple by constructing new roads, highways, revamp of the airports and railway links has got accentuated. This focus on allied infrastructure has led to an increase in tourism footfalls and improvement in the overall economy of these tier 2 and 3 towns. This has had an impact on land prices, especially new residential and commercial opportunities that have come up along new highways, near the airport, as well as areas located close to the revamped temple zones.”
Citing the example of Ujjain, he says that not only have footfalls in the temple town increased, massive real estate opportunities have opened up along the Indore-Ujjain road as well. Several listed developers are also planning to launch projects in Indore which is being seen as a gateway to Ujjain.
Dharmesh Shah, CEO, Hero Realty Pvt Ltd, that has a few projects in Haridwar, told HT Digital that while the firm already has a presence in Haridwar in both group housing and plotted developments, it is exploring possibilities in other locations to expand its presence. Of course, Shah is betting big on the upcoming Haridwar-Rishikesh Corridor on the lines of Ayodhya’s infrastructure blitzkrieg. The cost of a studio in Haridwar is close to ₹15 lakh and a 3BHK costs upwards of ₹50 lakh. Plots of 90 to 187 sq yards are priced at ₹40,000 per sq yard.
In Rishikesh, prices of properties in Tapovan which is located close to the main tourist attractions cost anywhere between ₹2 crore to ₹ ₹3 crore. Properties located close to the AIIMS hospital are available in the range of ₹40 to ₹50 lakh for a 2BHK, says Ravi Pundhir of Uttarakhand Properties, a real estate agency in Rishikesh.
In Varanasi too, prices of properties located close to the Ring Road or near the airport have gone up. According to Anuj Didwania, chairman, Didwania Group and head, Credai Purvanchal, a 2BHK apartment that cost ₹40 lakh five years back cost more than ₹70 lakh today. Besides locals who have been offered compensation or those wanting to relocate to new flats with modern amenities a few kilometers from the main city, several people from Bihar and South Indian are investing in properties in Varanasi.
In Vrindavan too, where the Banke Bihari Corridor promises to usher in a new era of development when it is up and running by 2026, buyers are primarily investors from Delhi and adjoining areas. According to K D Aggarwal, head of Mathura chapter, Credai, “Mathura is waiting for the next phase of development after Ayodhya.” Plots in Vrindavan today are available for ₹50,000 to ₹60,000 per sq yard. As for flats, a 2 BHK apartment is available for ₹30-50 lakh and a 3BHK for 60 lakh.