When small is big in Punjab housing
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.
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