Real Estate Market in Odisha: Prospects and Challenges

With challenges galore, Odisha real estate market soars high, at par with Noida and Gurugram. What drives this demand and can the market hold strong over time?

Pradeep Kumar Biswal

With challenges galore, Odisha real estate market soars high, at par with Noida and Gurugram What drives this demand and can the market hold strong over time?

Presently, the real estate scenario in Odisha is characterised by a dynamic and growing market, particularly in the key urban centres like Bhubaneswar, Puri and Cuttack. The State’s property market is being driven by a combination of infrastructure development, smart city initiatives, and a rising demand for both affordable and luxury housing segments.

Key Drivers of Growth

• Infrastructure Development: Ongoing and planned infrastructure projects are a major catalyst. The proposed Bhubaneswar Metro Rail for instance, is boosting demand and property value in areas along its route like Trishulia, Patia and Chandrasekharpur in the Smart City. However, the recent cancellation of the Metro tender has been a bolt from the blue. Expanded road networks and upgradation of Biju Patnaik International Airport are also improving connectivity and making exurban areas more attractive for homebuyers.
• Smart City Initiatives: Bhubaneswar’s status as a smart city is a significant factor. It has earned a reputation as a clean and safe city. Investments in smart infrastructure, digital integration, and sustainable urban planning are attracting both residents and investors, leading to a boom in real estate development.
• Economic Growth: The presence of IT hub and medical, engineering and management educational institutions in Bhubaneswar is creating jobs and attracting professionals, students, and families. This influx of population from remote areas and also from outside the state is creating a strong demand for both residential and rental properties. Similarly, Puri has become a favoured destination for tourists and the upcoming international airport has triggered the real estate market in and around the pilgrim town.
• Government Policies: Government schemes like the Pradhan Mantri Awas Yojana (PMAY) are helping to make housing more accessible for the urban poor and first-time buyers. The state government is also encouraging real estate developers to invest in Tier-2 and Tier-3 cities to promote balanced urbanisation.
• Regulatory Framework: Odisha Real Estate Regulatory Authority (RERA) was established in 2017 and during last eight years it has instilled confidence among the homebuyers by ensuring efficiency and transparency in the real estate sector. Speedy disposal of grievances of the aggrieved homebuyers creates a sense of confidence among them. The promoters have become more responsive towards their customers.

Market Trends and Segments:

• Residential Market: Bhubaneswar is seeing an increase in residential property prices, with an annual growth rate of 8-10% in some areas. There is a dual demand for both affordable and luxury housing. People see it as an investment opportunity and more and more buyers are booking apartments for investment purpose.
• Affordable Housing: Developers are responding to the demand from middle-income families and professionals by offering budget-friendly apartments and housing projects in suburban areas like Raghunathpur, Pahal, Patrapara and Sundarpada in Bhubaneswar.
• Luxury Real Estate: The luxury market is also booming, with high-net-worth individuals and NRIs driving demand for premium properties, especially in upscale neighbourhoods such as Chandrasekharpur, Patia, and Khandagiri. These properties often feature smart home technology, green building practices, and high-end amenities for the customers.
• Commercial Real Estate: The commercial sector is also expanding with increased demand for office spaces, co-working centres, and retail establishments, driven by the city’s emergence as a hub for IT, education, and healthcare.

Similarly, Cuttack’s real estate market is experiencing steady and stable growth, with property values increasing at an annual rate of 7-8%. The demand is primarily for 2 and 3 BHK apartments, which cater to nuclear families and young professionals. Areas like CDA Sector 6 & 9 are considered reliable investment destinations due to their excellent social infrastructure and connectivity. Areas adjacent to river Kathjodi near Trishulia are developing fast and catering to the needs of middle-income families. The rental market is also strong, with steady returns driven by a population of working professionals and students.

As far as Puri is concerned, studio apartments are much in demand. These are available with a budget of around Rs fifty lakh and appear affordable for middle class families. People from neighbouring states particularly West Bengal are eager to book these properties.

The overall real estate market sentiment is positive in Odisha. Both buying and selling properties in major cities like Bhubaneswar and Cuttack are considered profitable at the moment. Investors are seeing rising rental yields, particularly in commercial zones and IT hubs, while residential yields remain modest but stable. The government is promoting investment in Tier-2 and Tier-3 cities for more balanced development across the state. In future, the cities like Rourkela, Sambalpur, Balasore and Berhampur will emerge as hotspots for investment in real estate considering their potential for growth and development.

Challenges:

The real challenge for growth in real estate market in Odisha is availability of litigation-free large chunks of land; mostly between five to ten acres of size. There is absence of any real estate policy in the state like other states. Government land is not made available for real estate development by private entrepreneurs. Consequently, land prices are high in places like Bhubaneswar which make the cost of real estate properties at par with Noida or Gurugram. The middleclass people find it unaffordable. If Odisha government comes out with a solution, it would be better for the growth of the sector.

(Pradeep Biswal, retired IAS Officer, is a bilingual poet writing both in Odia and English. His poems are widely anthologized. He is also an editor and translator of repute. Views Expressed are Personal)