By-Harsimran Kaur Kalra, Real Estate Research Analyst , Chandigarh, 9th January, 2009 :City Beautiful Reality sector assumed prime significance due to the city’s strategic location. The city shares its borders with the states of Haryana in the south and Punjab in the north. It is surrounded by Mohali and Panchkula. The boundary of Himachal Pradesh is also not too far from it, giving a vibrant glow to its real estate sector. Indian real estate is passing from a slowdown and the global recession has tighten its claws on the reality sector surrounding Chandigarh, whereas, prices in Chandigarh are on its climax and will remain stable throughout the year without showing any sign of downfall.
“Though the price of properties on the outskirts of Mohali and Panchkula have come down up to 15-20% giving rise to the chances of any movement, the properties in the inner sectors have denigrated to 5-7%”, says Vipin Sharma, General Manager, Online Real Estate Pvt. Ltd. What can be the reasons of such a trend in Real Estate Industry and what future course it will take? Through this analytical review I try to find solutions to these questions for the real estate investors.
In real estate sector, housing accounts for a major component and is growing at a fast pace. Remainder consists of commercial office space, industrial space, shopping malls, hotels and hospitals. Growing nuclear families trend and rising income levels of middle class have contributed towards soaring housing demand. This trend ultimately leads to the rise in property prices in Chandigarh and vicinity. As the trend of economics, demand is high and so does the prices is high. Also availability of cheaper home loans makes it easier for the buyer to invest in real estate. But, worldwide global recession resulted in the hike in interest rates and this further impacted the plans of salaried class, who was earlier dependent on the home loans, thus, hampering their investment plans.
According to R.S.Walia, a Property Consultant, Chandigarh, “prices are on an all time high in Chandigarh, touching the skyline and are more than the prices in US, Canada and Australia. Due to this factor NRI buyers are stepping back and are more willing to invest in these countries”.
But the situation in Mohali and Panchkula is exactly opposite as in Chandigarh. Supply is high but the demand is low. Excess availability and unplanned growth leads to supply in abundance. But the government’s move to cut the bank rates has provided some respite to the sector. Government’s encouragement package and RBI’s move allowing banks to provide special treatment to realty companies may provide a breather to the sector. Also with the public sector banks slashing the home loan interest rates to boost the struggling realty sector would prove beneficial for the sector. “The situation is improving after the correction in Government policies and reduction in interest rates and movement in these two districts has been noticed as there are more sales queries these days”, claims B.S.Kohli, Kohli and Kohli Consultants. Also Government should regulate the policy of registration of the consultants in the city, which will indirectly affect the prices, claims an official from the Estate office, U.T. Chandigarh.
Though in the tricity region, one could not find any property in the suggested price range, but it would invigorate movement of property in the suburbs like Kharar, Zirakpur and Derabassi. Residential plots and old constructions are easily available in these areas in the suggested bracket and more specific for the investors the best investment opportunities are in Mullanpur and adjoining area which has recently come under planned development as the Punjab Government recently issued its master plan said Rakesh Gupta, Solitaire Properties Pvt. Ltd.
The buyers have adopted a wait and watch approach to grasp the best opportunity with the hope of reduction in loan rates. But this is the considered as the right time for the genuine buyer to invest in Chandigarh as there are higher possibility of good negotiations as compared to the outrageous prices in the year 2005-06, and was unimaginable for them to invest in the right property.