When small is big in Pun­jab hous­ing

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Mu­niesh­wer A Sa­gar mu­niesh­wer.sa­[email protected]­dus­tan­times.com

MO­HALI: The hous­ing sec­tor in Pun­jab is re­gain­ing lost growth prospects with the small built-up seg­ment at­tract­ing both buyer and builder.

In both, big­ger ci­ties such as Lud­hi­ana and smaller towns like Zi­rakpur, smaller houses, rang­ing from 50 sq yard to 150 sq yard, have seen in­creased de­mand.

“The smaller house seg­ment was the first to re­cover af­ter de­mon­eti­sa­tion. Un­like seg­ments where in­vest­ment re­turns are pri­or­ity, the smaller hous­ing seg­ment de­mand drives the mar­ket. Builders strug­gling with stag­nant de­mand af­ter de­mon­eti­sa­tion found the small-sized seg­ment as the best op­tion to solve their slow­down blues,” says Bhupin­der Singh, 54, an Am­rit­sar-based real es­tate con­sul­tant.

Lud­hi­ana was one of the first ci­ties where smaller prop­er­ties reg­is­tered a fast growth. “Builders, mainly lo­cal level and in the un­or­gan­ised sec­tor, started of­fer­ing sin­gle-storey and du­plexes houses. The de­mand picked up and the seg­ment cre­ated a niche. The sup­ply growth started in the pe­riph­ery of Lud­hi­ana city but slowly other parts also caught up,” says Deepak Badyal, pres­i­dent of the Lud­hi­ana Real­tors As­so­ci­a­tion.

In smaller towns such as Zi­rakpur and Ba­nur, cre­at­ing sup­ply in the small-size built-up seg­ment makes sense.

These re­alty mar­kets cater to the buyer de­mand in the af­ford­able hous­ing seg­ment. Peo­ple who can’t af­ford a house in rel­a­tively ex­pen­sive ci­ties such as Chandi­garh and Mo­hali opt for this seg­ment in Zi­rakpur and Ba­nur. “In Zi­rakpur, ar­eas such as Peer Much­hala, Dhakoli and Pab­hat are be­com­ing the hub of small-sized built-up houses. A sim­i­lar trend is vis­i­ble in nearby Ba­nur. In most cases, the de­vel­oper of­fers built-up houses in the form of in­de­pen­dent floors though du­plex on 50 to 80 sq yards are also avail­able,” says Kr­is­han Garg, 63, a real es­tate con­sul­tant in Zi­rakpur.

POL­ICY FAC­TOR

The de­mand and sup­ply dy­nam­ics only partly ex­plains the growth story of smaller built-up houses. Even gov­ern­ment pol­icy, or in some cases, lack of it, acts as an im­por­tant fac­tor in ex­pan­sion of the seg­ment.

“While the hous­ing de­part­ment has an af­ford­able colony pol­icy, no such po­lice ex­ists in mu­nic­i­pal ar­eas. This is shap­ing how sup­ply in this seg­ment is be­ing cre­ated and de­mand ab­sorbed. Even the re­sponse to the hous­ing de­part­ment pol­icy is sub­dued in most ar­eas of the state,” says a se­nior hous­ing de­part­ment of­fi­cial on con­di­tion of anonymity.

With de­vel­op­ment au­thor­i­ties such as the Greater Mo­hali Area De­vel­op­ment Au­thor­ity (GMADA) un­der the hous­ing de­part­ment fail­ing to de­liver on the af­ford­able hous­ing front, the gap in sup­ply is be­ing filled by the lo­cal builder.

While few are ap­ply­ing un­der the af­ford­able colony pol­icy, many are cre­at­ing sup­ply in the seg­ment.

“Builders create one or two units at a time. If these are bought, they build new sup­ply. This is how af­ford­able hous­ing sup­ply is be­ing cre­ated. This is the case more in the mu­nic­i­pal ar­eas,” says Singh.

With no de­fin­i­tive rules reg­u­lat­ing in­de­pen­dent floor seg­ment in mu­nic­i­pal ar­eas, builders are opt­ing for this con­fig­u­ra­tion to create smaller-sized hous­ing at af­ford­able rates. Un­der mu­nic­i­pal rules, in­de­pen­dent floors haven’t been de­fined.

Builders con­struct these un­der an or­di­nary house cat­e­gory and sell them. Builders don’t have to ad­here to strin­gent con­di­tions as laid down in other cat­e­gories such as colony or group hous­ing.

This re­sults in cost re­duc­tion and greater dis­cre­tion to the builder.

While this is cre­at­ing hap­haz­ard growth, it’s im­prov­ing the af­ford­abil­ity.

In mu­nic­i­pal ar­eas, there is no def­i­ni­tion on the min­i­mum size of a res­i­den­tial plot.

So, while the af­ford­able colony does im­pinge on these con­di­tions, for builders in mu­nic­i­pal ar­eas there are no such re­stric­tions.

“The re­sult is that builders are fo­cus­ing on these prod­ucts in the mu­nic­i­pal ar­eas. Only more or­gan­ised builders are cre­at­ing prod­ucts such as af­ford­able apart­ments. With buy­ers get­ting ready-to­move af­ford­able res­i­den­tial spa­ces in this built-up seg­ment, the growth is in­evitable. In fact, lack of gov­ern­ment reg­u­la­tion is al­low­ing for in­creas­ing pres­ence of builders and buy­ers in this seg­ment,” adds Garg.

The smaller house seg­ment was the first to re­cover af­ter de­mon­eti­sa­tion. The smaller hous­ing seg­ment de­mand drives the mar­ket. BHUPIN­DER SINGH, Am­rit­sar-based real es­tate con­sul­tant

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