Sta­bil­ity re­turns to land seg­ment in Am­rit­sar

Price sta­bil­ity is re­turn­ing to Am­rit­sar land seg­ment, though, the slow­down and the sub­dued mar­ket sen­ti­ment per­sists

Hindustan Times (Chandigarh) - Estates - - HT ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­

The five years of slow­down, then the de­mon­eti­sa­tion, im­ple­men­ta­tion of the Real Es­tate (Reg­u­la­tory and De­vel­op­ment) Act and GST regime (Goods and Ser­vices Tax) has pulled down the de­mand in Am­rit­sar’s realty sec­tor. The over­all slow­down in the hous­ing sec­tor has its bear­ing on the land seg­ment also and lost value in the last five years.

In the last cou­ple of months, price sta­bil­ity is re­turn­ing to the seg­ment.

“The seg­ment gen­er­ally fol­lows the over­all mar­ket trends. There were sharp price rises be­tween 2009 and 2011, when prices in some lo­ca­tions more than dou­bled. Most of the ap­pre­ci­a­tion took place on the GT Road (NH-1), Man­jitha and Air­port roads dur­ing this pe­riod. A num­ber of lo­cal and na­tional builders launched township projects in the area. They added to their land banks dur­ing this pe­riod. In ad­di­tion to it, the im­proved Indo-Pak trad­ing re­la­tions also ben­e­fited the land seg­ment in and around the city. The spec­u­la­tor in­vestor also fu­eled the price growth as trad­ing vol­umes re­main high dur­ing the pe­riod,” says DS Chugh, 56, a lo­cal real es­tate con­sul­tant.

The re­ver­sal in mar­ket for­tunes started in 2012 when the econ­omy started to slow­down and the real es­tate sec­tor also showed signs of down­ward slide. “The end-user de­mand couldn’t catch up with the in­creased sup­ply. In­vestors also with­drew from the mar­ket. But by then, builders were sit­ting on large un­sold in­ven­tory and started to strug­gle with liq­uid­ity crunch. So, from the builder, and the in­vestor, the de­mand for land sub­stan­tially de­clined,” says Ra­jiv Gu­lati, 45, a lo­cal realtor.

Prices for land, on an av­er­age, vary be­tween ₹20 lakh per acre to ₹1 crore per acre de­pend­ing on the lo­ca­tion of the prop­erty. “The slow­down im­pacted more the land lo­cated far from the city or in the in­te­rior ar­eas. On na­tional high­ways on the city’s out­skirts, the price cor­rec­tion was min­i­mal due to lim­ited sup­ply,” says Chugh.

The sec­tor is still strug­gling with slow­down, but, in the last cou­ple of months, price cor­rec­tions in the seg­ment have started to sta­bilise. “A new gov­ern­ment took over in the state, which raised the ex­pec­ta­tions and checked the pes­simism in the mar­ket,” says Gu­lati.

Lo­cal real es­tate ex­perts say that the last five-year slow­down eroded the gains of the last boom years. “There is lit­tle scope for ma­jor price cor­rec­tions in the seg­ments. Most in­vestors who were strug­gling with hold­ing on to their prop­er­ties have al­ready ex­ited the mar­ket at lower prices. Now, the land is ei­ther with builders who are un­likely to sell off their land banks, or with the lo­cal agri­cul­tur­al­ists that are also not keen to sell their lands at lower prices. This has also con- trib­uted to the price sta­bil­ity in past few months,” says Ra­jbir Singh, 37, a city-based trader and real es­tate ex­pert.

Some real ex­perts also con­tend that the de­mon­eti­sa­tion also played a part in sta­bil­is­ing the prices in the land seg­ment with peo­ple in­vest­ing in the seg­ment. This spiked de­mand in the seg­ment and sta­bilised prices.

The seg­ment is ex­pected to wit­ness sta­ble de­mand and prices in the short-term. “It is still a good time to en­ter the mar­ket. At present, he is more likely to get land at ac­tual price rather in­flated prices. Sell­ers are still ami­able to price ne­go­ti­a­tions. For the in­vestor, though, it is best to sit out the short-term un­less they are ready for a longterm in­vest­ment,” says Chugh. The in­vest­ment re­turns from the seg­ment aren’t go­ing to be pos­i­tive un­less the main end-user, the builder, re-starts adding to his land banks for new projects or ex­pand­ing older projects, say lo­cal realty ex­perts.

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