Mov­ing to­wards sta­bil­ity

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


CHANDI­GARH: The Ja­land­har real es­tate mar­ket has dis­tinc­tive char­ac­ter from the gen­eral mar­ket trends in the state. The city, lo­cated in the Do ab a re­gion of the state, with large num­ber of lo­cals from the belt set­tled abroad, de­pends heav­ily on the N RI( non­res­i­dent In­dian) in­vestor for realty growth.

This also gives dis­tinc­tive realty growth tra­jec­to­ries. At present, the lo­cal con­di­tions fol­low the sub­dued sen­ti­ment across the state’s realty sec­tor. In most lo­ca­tions in the and tier-III-cities—the sup­ply ex­ceeds de­mand and price cor­rec­tions are the norm. In Ja­land­haral so, the realty trend is on the same pat­tern.

In the land seg­ment, though the pres­sure on prices is rel­a­tively less, yet, land as­sets have con­sis­tently lost value in the last cou­ple of years in most lo­ca­tions around the city.

“In the state the city comes sec­ond only to the Lud­hi­ana in terms of realty im­por­tance. In the past few years, the res­i­den­tial and com­mer­cial seg­ments in the city came un­der pres­sure of price cor­rec­tions as both lo­cal and NRI de­mand turned neg­a­tive. The dip in the NRI de­mand has par­tic­u­larly im­pacted the land seg­ment as this is tra­di­tion­ally a favoured seg­ment with them,” says RP Singh, 43, a lo­cal real es­tate con­sul­tant.

Prices for the agri­cul­tural land in and around the Ja­land­har city vary be­tween ₹1 cr ore to ₹5 crore per acre de­pend­ing on the lo­ca­tion. For buy­ers look­ing for cheaper al­ter­na­tives, in­te­rior ar­eas and lo­ca­tions fur­ther away from the city can be ex­plored where an acre can be pur­chased at even ₹15 lakh. “Prices had peaked dur­ing the 2009-11 pe­riod when the in­vestor de­mand was high. The trans­ac­tion vol­umes were in the seg­ment at the time. While in­vestors bought land in and around the city from the lo­cal land own­ers, pri­mar­ily the agri­cul­tur­al­ists, they in­turn, bought land in the in­te­rior ar­eas, away from the city. This fu­elled both prices and de­mand in the seg­ment,” says Jaiveer Garg, 49, a lo­cal real­tor.

Since 2011, how­ever, the seg­ment reg­is­tered steadily de­creas­ing de­mand .“The de­mand lev­els are low at present. If com­men­su­rate with the dip in de­mand lev­els, prices in the seg­ment could have been in sharper de­cline. But, un­like the res­i­den­tial and com­mer­cial seg­ments, there is gen­er­ally bet­ter hold­ing ca­pac­ity in the seg­ment. Both builders with large land banks and the agri­cul­tur­al­ist are not des­per­ate to sell their land hold­ings. Only in­vestor who timed the mar­ket in­cor­rectly ex­ited the mar­ket at lower rates. This pri­mar­ily in­cluded the NRI in­vestor. They have turned net sell­ers from net buy­ers. In the cur­rent mar­ket con­di­tion is tough to exit the mar­ket even low­ered down prices ,” says Garg.

Even though in­vest­ment re­turns de­clined in the seg­ment in last few years, yet, the land seg­ment is com­par­a­tively bet­ter in­vest­ment op­tion than other realty seg­ments, say lo­cal realty ex­perts. “The prices aren’t ex­pected to de­cline sharply in the near fu­ture. But, in the other realty seg­ments, due to low money in flows, price cor­rec­tions can con­tinue in both the short and medium terms. For the in­vestor, the re­turns might not be very at­trac­tive at present and in the short-term but the seg­ment can hedge his in­vest­ments in the seg­ment ,” says Singh. Some ex­perts be­lieve that the worst in the seg­ment is over.

“The af­ford­able hous­ing seg­ment, cur­rently be­ing pro­moted by the state poli­cies, can fuel de­mand in the land seg­ment. While the in­te­rior ar­eas of the city are too ex­pen­sive to sup­port the growth of af­ford­able hous­ing, in the nearby ar­eas, though, builder de­mand for land for con­struct­ing af­ford­able hous­ing can re­vive the seg­ment. The in­vest­ment re­turns from the seg­ment, aren’t ex­pected to turn pos­i­tive in the near fu­ture,” says Garg.

Over­all low de­mand in Ja­land­har realty mar­ket has slowed down growth in land seg­ment also.

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