End-user can explore market in Patiala as the sellers are open to price cuts
PATIALA: Buying agriculture land in Patiala is getting cheaper with the land consistently losing its value in the past couple of years. Though, prices in this segment started on a downward trend around six years back, yet, in the past couple of years, the corrections have become sharper, say the local real estate experts.
“In the last two years, agriculture land has lost more than the gains made in the first half of the decade. For instance, two years back, an acre was worth ₹50 lakh, andi snow available at ₹22 lakh to ₹25 lakh per acre. This is in a location that is in proximity to the city. Land located further away from the city is available at a price range of ₹10 lakh per acre to ₹15 lakh per acre,” says Gurpreet Singh, 40, a city-based real estate consultant.
The end-user demand was driven by co lo ni se rs floating plotted colonies. But in the past six years, the demand from both, in terms of investors and end-users, for the agriculture land, has declined. “The builder demand dip coincided with the overall slowdown in the realty market. When demand for the residential and commercial units started to decline, demand for new projects and expansion in older projects also declined. Builders are in no position to add to their land banks as they are short on liquidity and struggling to sell their unsold inventory ,” says N av deep SM al-hotra, 37, a local real estate advisor.
The segment, in the city and the adjoining areas, attracted investor inflows a decade back, when returns from the market were attractive. Currently, the market sentiment is subdued.
“Two types of investors were interested in the local land segment. People selling more expensive land in places such as Mo hali and Ludhiana were coming to Patiala and adjoining areas. For instance, such investors would sell their land for ₹1 cr ore per acre in Mohali, and then reinvest the raised money in buying cheaper land in proximity of Pa ti alain the price range of ₹20 lakh per acre to ₹50 lakh per acre,” says Singh.
The NRI (non-resident Indian) realty investor was also active in the area during the boom years. “When the returns were good from the segment, the N RI investor was active in the market. But, currently there is a total absence of the N RI in flow in this segment. Instead, we are witnessing local residents investing in places such as Australia and Dubai,” says Singh.
The government policy emphasis and incentives to affordable housing is fuelling growth in the agriculture segment in some of parts of the state’s realty. But accordingto local realty experts, the land segment in Patiala isn’t expected to gain from different policy initiatives and changed builder focus on affordable housing .“Builders entering the affordable housing segment are using their old land banks, and are not purchasing new land ,” says Malhot ra. Cheaper land also discourages the builder to buy land to tap into affordable housing potential.
“The home buyer can buy ₹3,000 per sq yard plot. In ₹20 lakh to ₹30 lakh, one can construct a 200sq yard house. So, affordable housing is not such a big issue in the city. It is unlikely to fuel demand for agriculture land in the city,” says Singh.
Growth in the segment isn’t likely to materialise in short-and medium-term. For investors, the best option is to defer in investments in the segment
Once a favoured destination for realty investors, the relatively cheaper agriculture land in and around Patiala has no takers and sharp price corrections are the norm.