A never-ending tale of woe

Real estate

By Vasu

It has become the never- ending tale of woe. Property tales abound, but in the past two years have always featured the gradual decline of real estate value. Once such incident occurred when a senior journalist was posted to Delhi. Trying to sell her HIG apartment in the Housing Board Complex at Manimajra she received a direct offer of Rs 18 lakh. Counting on adding a couple of lakh to the figure, she desisted. Today the market has declined further and brokers promise her around RS. 14 lakh if she is willing to wait a few months. Another bank official sold off his 10-marla house facing a local market in the prime northern sectors of the city, since he found the noise levels unbearable and the crowds not to his liking. A couple of years down the line the market became a fast food centre and the value of the property appreciated considerably. These two instances illustrate the importance of timing in selling or purchase.

While a commercial floor space purchased in Swastik Vihar during 1994 at a cost of Rs 4 lakh is today priced at Rs 15 lakh in spite of the recession, which plagues the property market. The showrooms and booths at Daddu Majra, priced at Rs 5 lakh for a double-storeyed showroom a few years back jumped up to Rs 17 lakh for ground floor alone after the announcement of the HIG, MIG housing board flats in the vicinity. The promise of a captive large clientele of flats often pushes up commercial property in the vicinity.

Another one-kanal house, which went up for sale in Sector 11 of Chandigarh, fetched its owners around Rs 75 lakh, a price which no other property of similar size fetches in other sectors. The reason for the lack of decline in Swastik Vihar is the commercial scope and interest generated by the immense market potential there while the sector 11 property had been targeted by NRI’s for long. The fact remains that even in these wiped out markets one can pick up property at never before rates or get a good deal.

Connectivity is another important factor which determines property rates as is evident by the trans- Yamuna colonies where values doubled the day the Nizammuddin bridge was double laned by L&T.

Panchkula is slated for a similar boom in the future. With four-planned link roads, prices will appreciate in this satellite of Chandigarh. As of now the main connection to Panchkula is overburdened. Plans are on to make another connecting road operational, by March next year. There is another proposal of two more roads — one connecting the airport to Chandigarh railway station to Panchkula beginning at Hallo Majra. The other will link the Lake and Swastik Vihar.

The third will be from the airport to Makhan majra to railway station with a side road to Panchkula. The fourth, already under operation, offers another connection to Panchkula via the Industrial area.

The locations around these obviously acquire importance and speculators feel it is an opportune time for investment.

The milk colony of Dhanas, which went abegging till a few years back became the favourite speculative site after it was announced that the Subzi-Mandi in Sector 26 would shift to a location close to this area.

It is not only industry which pushes up costs of agricultural land like it has in the Dera Bassi belt where land available at Rs 2 lakh per acre is now sold for around Rs 22 lakh for main road positions. Tourism and the add on motels, hotel, restaurant industry pushes up land prices like never before.

Any investment on the periphery is perhaps the best option today, says Jagdeep Sukhija, a leading real estate developer in the city. The pressure on the land in Chandigarh is phenomenal with one kanal plots ranging between Rs 50 and 60 lakh. If the government fails to open up development in this region the pressure on land is bound to do so, he feels.

The common man and even the small businessman is totally eliminated from land transactions in the city, he says. Only people with dollar accounts or those who have disposed off property in Delhi, Calcutta, Mumbai can afford to pick property off the shelf. Five years ago businessmen could purchase houses but today housing is out of reach, even for them. However, this is the right time to buy, as prices are low. But the prices in Chandigarh have not fallen as desired.

The land rates here are a trifle over-inflated, and corrections are due, he adds. Also land here is captive since even those who desire to set up schools, nursing homes etc cannot just buy up plot and get working as is the case in Patiala, Jalandhar, Ludhiana. For Chandigarh it is only the periphery, he concludes.