Stag­nant res­i­den­tial realty mar­ket in Chandigarh

Hindustan Times (Chandigarh) - Estates - - ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

One of the long­est slow­down in Chandigarh realty mar­ket his­tory, spread over more than six years, has ex­tended into 2018.

The im­pact of slow­down on the home­buyer, though, has changed over last few months.

While ear­lier, the home­buyer, par­tic­u­larly, the en­duser was gain­ing from the slow­down in terms of the price cor­rec­tions of res­i­den­tial prop­erty and prop­er­ties be­com­ing cheaper, now, he is faced with stag­nant prices.

The rel­a­tively low trans­ac­tion not­with­stand­ing, the lim­ited hous­ing sup­ply in the city has fi­nally put a stop to sharp price cor­rec­tions wit­nessed in the city till around one year back, say lo­cal real es­tate ex­perts.

LOOK­ING UP, BUT NOT VERY HIGH

Rel­a­tive price sta­bil­ity achieved in the last four-five months in the city has been achieved on the ba­sis of lim­ited hous­ing sup­ply and the end-user re­turn­ing to the mar­ket af­ter the shock of de­mon­e­ti­za­tion of last year.

“The end-user is back in the mar­ket. He is ex­plor­ing and mak­ing pur­chases on the ba­sis of his need. The realty in­vestor is still miss­ing from the mar­ket. The prospects of low re­turns and stingy trans­ac­tion vol­umes are keep­ing the in­vestor away from the city’s hous­ing mar­ket,” says San­jiv Sharma, 54, a Chandigarh based real es­tate con­sul­tant.

Most of the buyer ac­tiv­ity is in the rel­a­tively smaller sized prop­er­ties.

“The end-user de­mand is mainly for the prop­er­ties that range from 5 Marla to 10 Marla (125 sq yard to 250 sq yard). There are buy­ers and sell­ers of these prop­er­ties in the mar­ket. For other big­ger sized prop­er­ties, while the seller of­fer­ings are there, the buyer in­ter­est is very lim­ited. There are also few buyer queries for the prop­er­ties big­ger than 250 sq yard,” says San­jay Arora, 43, a lo­cal real es­tate con­sul­tant.

The buyer ac­tiv­ity is mostly lim­ited to the plot­ted de­vel­op­ments, and in the re­sale mar­ket. The city doesn’t have a pri­mary mar­ket. For new prop­er­ties buy­ers have to move to the pe­riph­ery.

Lo­ca­tion of a prop­erty is the de­ter­min­ing fac­tor whether there is de­mand for a prop­erty or not. “It is dif­fi­cult to at­tract a buyer for a prop­erty in or­di­nary lo­ca­tions. The de­mand im­proves for prop­erty with good

BAR­RING SMALLER SIZED PLOTS, THE UT RES­I­DEN­TIAL REALTY MAR­KET IS STRUG­GLING WITH LOW DE­MAND

lo­ca­tion, like near a park, or for a cor­ner plot, etc. Though mar­ket con­di­tions have changed in the last six months, yet, the buyer can still be choosy,” says Arora. The hous­ing op­tions and va­ri­ety for the buyer is in­creas­ing in the Chandigarh tric­ity pe­riph­ery. The city buyer can now ex­pect rel­a­tively sim­i­lar in­fra­struc­ture qual­ity in the pe­riph­ery projects. Ear­lier, most of these projects were un­der-con­struc­tion but now be­cause of var­i­ous rea­sons like the com­ing of real es­tate reg­u­la­tory au­thor­i­ties, these projects are near­ing com­ple­tion. This also low­ers the de­mand in the city.

PRICE LEV­ELS

The av­er­age price level, say lo­cal realty ex­perts, are hov­er­ing at the level reg­is­tered last year even though mi­nor fluc­tu­a­tions are there de­pend­ing on the size of the prop­erty.

“Prices in the smaller sized seg­ment have marginally im­proved by 5% to 10% in the last four months. De­mand from the end-user and lim­ited sup­ply has pushed up the price level in these size seg­ments,” says Sharma. In the big­ger sized plot­ted seg­ment and the apart­ment seg­ment, be­cause of low trans­ac­tion num­bers prices are stag­nant. “When there is mar­ginal im­prove­ment in prices with a prop­erty sell­ing at a higher price than the preva­lent mar­ket prices, then, af­ter a lull in de­mand, there is again price correction. This price-de­mand process is cur­rently the norm in the city’s realty mar­ket, and so, prices even in the smaller sized cat­e­gories are prac­ti­cally sta­ble,” says Arora.

Lo­cal fac­tors and the over-all realty mar­ket con­di­tions are the fac­tors re­strict­ing the mar­ket re­vival in the city’s realty sec­tor. “The higher level of the col­lec­tor rates, which are in fact, some­times even higher than the mar­ket rates, is a fac­tor dis­suad­ing the buyer from en­ter­ing the mar­ket An­other sev- eral re­stric­tions on the apart­ments and group hous­ing projects should be eased so as to al­low in­creas­ing trans­ac­tions, eas­ier avail­abil­ity and in­creas­ing af­ford­abil­ity of prop­er­ties in the city. This will im­mensely help the buyer and the mar­ket it­self ” says Sharma

HT FILE

The buyer ac­tiv­ity is mostly lim­ited to the plot­ted de­vel­op­ments, and in the re­sale mar­ket.

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