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Rediff News  All News  » Business » Real estate prices hit the roof in Chandigarh

Real estate prices hit the roof in Chandigarh

January 24, 2007 09:52 IST

Cricket player Harbhajan Singh was successful in zeroing on a four kanal house in posh Sector 9 of Chandigarh recently after a hunt of two years.

Yes, this is the right time to strike a property deal in Chandigarh and its periphery. After an unprecedented escalation in the real estate prices for about three years, the realty bubble has become standstill.

The experts call it a correction in the real estate prices.

The prices started escalating three years back and went through the roof. Several factors like industrial development in Baddi, demand from NRIs, foray of the IT sector in the tricity of Chandigarh and easy availability of housing finance were the factors often quoted for the northward movement of realty in Chandigarh.

Mohali is the frontrunner in registering a fall in the value of residential properties. The uncertain political scenario in Punjab due to assembly polls scheduled for February 13 has cast its shadow on the real estate business.

The ruling Congress offered sundry incentives for the developemnt of industry in Mohali and creating a special economic zone by Quark and proposing more SEZs for the region. This caused a spurt in the demand for property for genuine and specilative purposes.

But the uncertainity of the outcome of the elections has severely undermined the returns on investments in real estate. The Shiromani Akali Dal, a strong contender in the assembly polls, has announced reviewing all the real estate projects awarded by the Amarinder Singh government.

However, inquiries revealed that prices has started coming down by 20 to 25 per cent after touching a peak, in the case of Mohali, Panchkula and its peripheries like Zirakpur, Dera Bassi and Rajpura.

Making it tough time for consultants and investors with no hope of revival of the real estate boom witnessed in the past couple of months. However in case of Chandigarh, the prices has gone down by 8-12 per cent.

According to a property consultant in Mohali, a 500 square yard plot in Mohali which was priced at Rs 1.6-1.9 crore (Rs 16-19 million) in prime location, now it is available at Rs 1.3-1.6 crore (Rs 13-16 million).

Sources in Emaar MGF, a real estate player, informed Business Standard that this is the right time to buy a property in Chandigarh, Panchkula and Mohali as prices have slashed by 15-25 per cent to what it was eight months ago. The prices had touched the roof and the current slump clearly indicates that the prices were artificially jacked-up by the property dealer-investor nexus, he added.

Talking to Business Standard, Mahesh Budhiraja of Goodwill Property Consultants said, "We can't say that the rates has gone down, but the prices are in 'correctional mode.'

Mangat Rai of Subhash Mangat Property Consultants said that the investors and property dealers adopting a 'wait-and-watch' policy, only genuine buyers and sellers are trading so the transactions have come down.

Meanwhile, the slump in the real estate market could also be established from the fact that a majority of the promoters going in for 'pre-launch' booking of the residential plots and flats have deferrred their plans.

Players in the real estate business informed that the worst hit have been the investors and speculators, who entered into the real estate market to make a fast buck.

Komal Amit Gera & Vijay C Roy in New Delhi/Chandigarh