The property market in the key cities of Uttar Pradesh is currently on a roll, including that of Ayodhya. And the historic inauguration of the Ram Mandir on January 22 is all set to give Ayodhya’s real estate a further boost. In fact, property prices in and around the city have already risen significantly during the last 4-5 years and are likely to surge further in the years to come.

According to Anarock research data, realty demand in Ayodhya has risen significantly ever since the much-awaited verdict was announced by the Supreme Court back in 2019. There is a growing demand by not just locals but also investors from outside the city, including businessmen.

“Property prices in the city were estimated to have shot up by nearly 25-30% in 2019 immediately after the verdict. In 2019 post the verdict, land prices had risen to nearly 400-700 per sq. ft. in the outskirts (at Faizabad Road). Within the city-limits average prices stood between Rs 1,000 and Rs 2,000 per sq. ft. during this time. However, the average land prices in the outskirts of Ayodhya have jumped up much higher. As for areas within city limits, average prices have shot up to be anywhere between Rs 4,000 and Rs 6,000 per sq. ft. Thus, there has been a significant jump in average prices between 2019 and 2023,” informs Anuj Puri, Chairman, ANAROCK Group.

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Not just a realty hotspot, Ayodhya is also set to become a hotbed of hospitality activity across all budget bandwidths. The demand for hotel spaces from budget to 5-star categories is going to see a tremendous increase after the temple consecration, since Ayodhya is shaping up to be one of the most prominent tourism and religious travel hotspots of the country.

What should investors do?

So, keeping all these things in mind, what should an investor do now? Is this the right time to invest in real estate in Ayodhya?

According to realty experts, spurred by a substantial $6-billion infrastructure investment, owing to the inauguration of the Ram Mandir, Ayodhya is undergoing an unprecedented transformation. This development has sparked a significant upswing in the property market within the holy city, resulting in soaring property prices. Investors, both domestic and international, are actively pursuing valuable land parcels in close proximity to the temple site.

The recent establishment of an airport has further intensified the real estate market in the surrounding areas. However, due to limited land availability and escalating demand, property prices in certain zones have reached almost unaffordable levels. As a well-connected city, Ayodhya holds substantial growth potential in the upcoming years, attracting the attention of prominent developers across the country. With various townships and private hotels slated to be constructed in Ayodhya, developers anticipate significant opportunities and substantial returns on investment.

“The massive investment going into infra/connectivity upgrades and the ensuing multi-billion business and economic boom will be triggering great real estate investment opportunities. Especially in view of the mega tourism boost, there will be a big demand for second homes or vacation homes, senior/retirement homes and home stays. This will not only throw up opportunities for high capital appreciation of property but also good rental returns,” observes Vinod Behl, Senior Journalist and Expert on Real Estate.

In fact, “both residential and commercial real estate investors will significantly benefit from this prevailing wave of development in Ayodhya with assured price appreciation in the near future. Already rental prices have reached favourable levels,” says Ravi Nirwal, Sales Director and Principal Partner, Square Yards.

For example, areas within close proximity of Ram Mandir are quoting rental prices of Rs 10000-15000, which is pegged to increase further as the city transforms further. Even commercial investors can expect steady returns and can enjoy a windfall in gains upon selling the property after a certain period of time.

“As Ayodhya revels in the joy of Ram Mandir celebrations, property prices have shown significant upswing. Since the Supreme Court announced the temple verdict in 2019, real estate prices have surged by up to ten times, fluctuating between Rs 2000 per sq ft to almost Rs 20000 per sq ft within 5-10 kms of the temple site. This boom is more visible due to the pace at which land deals are inked for luxe hotels, retirement homes, guest houses, and homestays. By the next decade, religious tourism, commercial activity and infrastructure boom will inflate land prices by 12-20 times,” adds Nirwal.

Places such as Chaudah Kosi Parikrama, Ring Road, Deokali, and Nayaghat are among the prime locations for investment in Ayodhya. These places, located within 5-15-kilometer radius of the temple, offer strategic investment opportunities. Additionally, there is an increased investment activity in land parcels along the Gorakhpur Faizabad Highway.

Adopt Cautious Approach

However, with property rates in Ayodhya surging by the month, it is essential to keep an eye on the property prices and trends.

“Investors looking to invest in Ayodhya real estate need to adopt a cautious mindset and scrutinize the veracity of the title and ownership documents associated with properties they are looking to invest in. For commercial investments, it is recommended to thoroughly check local zoning laws and regulations governing land use to steer clear of any pitfalls. Further, conducting thorough due diligence is necessary for property-related regulations, including considerations of land usage, construction norms and other property restrictions,” suggests Nirwal.

In fact, in view of a big demand-supply imbalance and due to the entry of investors, there is inflated pricing of land, leaving little scope for unexpectedly high gains in the short term. “Therefore property buyers should invest prudently especially as there is overvaluation of property. Also, as there’s scarcity of unencumbered land, retail buyers should exercise caution or rather they should stay away from land buying. Instead they should go for plotted developments and apartments by trusted developers for safe investment. They should also wait for the present euphoria of inflated pricing to die down for profitable investment,” suggests Behl.

Moreover, investors need to evaluate the accessibility and adequacy of fundamental utilities such as water supply, electricity, and sewage systems. Finally, conduct a comprehensive assessment of the city’s master plan to gain valuable insights into the potential growth of the subject property in the future.

Thus, Maryada Purushottam Ram has finally got a permanent home in Ayodhya and if you wish to stay close to him by buying a home there, just go for it. However, if you want to invest in a piece of property with an eye on price appreciation, then tread with caution.