Ayodhya's Real Estate Market Slows Down After Initial Frenzy Post-Ram Mandir Inauguration
A year after the Ram Mandir inauguration, Ayodhya's real estate market has seen a significant cooldown, with a 63% decline in residential property searches in the October-December 2024 quarter compared to the same period in 2023.
AyodhyaReal EstateRam MandirProperty PricesHospitality SectorReal Estate NewsJan 23, 2025
The initial surge in property demand and prices has cooled down, with a significant drop in residential property searches.
According to data from Magicbricks, Ayodhya's real estate market saw a 63% year-on-year decline in residential demand in the October-December 2024 quarter compared to the same period in the previous year.
Just before the consecration ceremony of the Ram Mandir in January 2024, demand and prices had surged.
However, this momentum began to wane after June 2024.
Real estate experts attribute this shift to market saturation and a natural cooling down following a period of heightened activity.
Local brokers report that the hospitality sector has also seen a slowdown.
No major hotel projects have started on the ground in the year following the temple's inauguration.
Only a few budget hotels and home-stay options have been added.
Land prices have mostly remained stable since the consecration ceremony.
Dip in DemandMagicbricks data shows that searches for residential property in Ayodhya had risen by 58.03% quarter-on-quarter in October-December 2023, peaking in the January-March 2024 period with a 186.54% growth sequentially.
However, this momentum has gradually subsided, and searches for residential properties dropped by 63% on-year in the fourth quarter of 2024.
At the same time, residential supply in Ayodhya recorded a 39% annual growth, ensuring market availability even as demand levels normalized.
Experts say the demand for properties in Ayodhya, which experienced a surge at the beginning of 2024, has since stabilized significantly.
Prasun Kumar, Chief Marketing Officer at Magicbricks, noted that most of the available residential units have already been sold.
New developments are primarily targeting the premium segment, which is currently discouraging potential buyers.
The slowdown in temple construction and a reduction in flight operations have also led to a cautious, wait-and-watch approach among prospective buyers.
Price NormalisationAfter the temple consecration ceremony in 2024, Ayodhya's residential prices saw a significant spike in the April-June 2024 quarter, rising by 29.36% on a quarterly basis.
Prices reached an average of Rs 8,491 per square foot (psf), with property prices close to the Ram Mandir area fluctuating between Rs 10,000 and Rs 15,000 psf during the time of the inauguration.
However, in July-September 2024, prices saw a slight adjustment, falling by 3% to Rs 8,237 psf.
They further declined marginally to Rs 8,212 in October-December 2024, indicating a move towards normalization.
Slow Hospitality Sector GrowthGovernment authorities highlight the enormous possibilities for the hospitality sector in Ayodhya, given the importance of religious tourism.
However, local brokers and businessmen report that no major hotel projects have started on the ground in almost a year.
Sharad Kapoor, a businessman and representative of the Ayodhya-Faizabad hospitality sector body, said that apart from the Taj Group and Leela Group of Hotels, no other major hospitality chains have started work on the ground in Ayodhya since the inauguration of the Ram Mandir.
The Taj Group is constructing a hotel near the airport on a 1.5-acre plot, while the Leela Group is developing the palace hotel, The Sarayu.
After the inauguration ceremony, only 8-10 small hotels have opened in the temple town.
The real estate boom, it seems, has taken a pause as activities concerning real estate have ebbed.
Future OutlookRealty experts believe that Ayodhya has significant potential for religious or pilgrimage tourism.
The demand for mid-sized and budget hotels and home-stays is likely to grow.
However, the religious tourism segment in real estate is still emerging in India, so initial growth is expected to be slow.
Market observers predict that the next two quarters will remain subdued.
Ayodhya is expected to see good traction in demand and sales after the Ram Mandir project is fully completed in March 2025.
Frequently Asked Questions
What happened to Ayodhya's real estate market after the Ram Mandir inauguration?
After the Ram Mandir inauguration in January 2024, Ayodhya's real estate market experienced a significant cooldown. There was a 63% year-on-year decline in residential property searches in the October-December 2024 quarter compared to the same period in 2023.
Why did the demand for properties in Ayodhya drop?
The demand for properties in Ayodhya dropped due to market saturation and a natural cooling down after a period of heightened activity. New developments are primarily targeting the premium segment, which is discouraging potential buyers.
How have property prices in Ayodhya changed since the Ram Mandir inauguration?
Property prices in Ayodhya saw a significant spike in the April-June 2024 quarter, rising by 29.36% to an average of Rs 8,491 per square foot. However, prices have since normalized, falling to Rs 8,212 in October-December 2024.
What is the current state of the hospitality sector in Ayodhya?
The hospitality sector in Ayodhya has seen a slowdown. No major hotel projects have started on the ground in almost a year, with only a few budget hotels and home-stay options added. The Taj Group and Leela Group of Hotels are the only major players currently working on new projects.
What is the future outlook for Ayodhya's real estate market?
The future outlook for Ayodhya's real estate market is cautiously optimistic. The demand for mid-sized and budget hotels and home-stays is likely to grow, but the religious tourism segment in real estate is still emerging. Ayodhya is expected to see good traction in demand and sales after the Ram Mandir project is fully completed in March 2025.
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