REAL ESTATE
Property scene has never been so grim

By Vasu

IT is like a relentless heat wave, say miserable brokers across Chandigarh, Punjab and Panchkula. A never-ending recession in the property market which shows no sign of abating or even providing a temporary respite to help them book profits or at least cut loose from dead invsetments that most of them have burnt their fingers with.

The property scene has never been so grim. It is like the militancy days of Punjab when property in that state did not find any buyers, say brokers. Today, the once-sought-after Chandigarh and the skirting areas fail to attract investors. The city and surroundings had put up a brave front and held out against the nationwide property slump till about six months back, says K.K. Arora, a dealer in Panchkula. Till then the property prices were stagnant, as they had been for the last one and a half-years. But now the decline is complete and Chandigarh is like any other metro with declining property values. Not only land prices, even the cost of construction has come down, with materials cheaper than ever before. There has been a minimal 10 per cent decline in the price of bricks, steel, wood and sanitary ware, say stockists. Even cement, which has seen a slight rise in rates, is available at lesser rates with dealers cutting down on their margins and offering products at very competitive rates.

Houses constructed by builders incorporating the latest amenities have also been a casualty of the slump. Even fully finished houses are not attracting buyers, in spite of the builders bringing down prices by amounts varying between 10 and 15 per cent. The new upcoming sectors are the worst hit. In Panchkula, sectors 25 and 26, which have an occupancy rate of a mere 30 per cent, evince no interest in buyers, with prices declining by 30 per cent. In Sector 21, the decline is at least 20 per cent, while in sectors 2, 4 and 12-A, the decline is over 15 per cent. Even the once posh sectors are not spared with an over 10 per cent decline in sectors 6, 8, 15, 16, 9 and others.

The recent allotment by The Haryana Urban Development Authority under which 85 acres were given to various societies in sectors 20, 23, 24, 27, 28 and 29 has not helped matters either. Already there is a virtual glut of society flats. The new category of allotments mainly includes EWS and government department employee societies along with other categories. Though the societies are yet to be given possession of the land, brokers fear that the sudden influx of so many more residential dwellings will further dilute the market. Earlier land allocation to a society would inevitably trigger off a stampede to buy membership at a premium. Several members of these societies who had made the initial deposit with this in mind have lost out, for leave alone premiums; buyers are not even picking up shares at par.

Even in the societies of the Mansa Devi Complex where good flats are available, mostly in a ready-to-move-in condition, premiums have gone down. Premium on such flats has come down by 50 to 75 per cent. Residential plots and houses aside, even industrial plots today are not finding any takers. The current absence of good business opportunities is partly the reason which along with the lack of any government policy on transfer of plots results in lack of buyers for this category.

Commercial property was one area which always held up the property market. In Panchkula, the bottom has fallen out of this segment as well, due to the absence of money in the market and the absence of any serious business in the area. Not only private commercial property but even the government auctions of HUDA have generally been a washout, failing to attract good bids in the past one year.

In Chandigarh a similar situation prevails, with prices down by 20 per cent, despite the limited availability there.

For a 10-marla plot in Chandigarh, the rates are pegged at Rs 35 lakh, whereas just six months ago similar property fetched between Rs 40 and 42 lakh. The situation is better in the prime northern sectors but old houses in sectors 15, 16 and 10 built on 500 sq. yard plots today fetch Rs 55 to Rs 60 lakh, depending on location and construction.

Mohali, always considered the poor cousin of Chandigarh and Panchkula, is seeing the winds change in its favour today. The decline in plot rates has been a mere 10 to 15 per cent partially because the escalation and inflation was lesser there.

In the Modern Housing Complex at Manimajra, the price of duplex houses as well as flats has declined by about 20 per cent. And even on the down rates, there are few buyers if any, say brokers. However there is one area which has seen only a marginal decline even in times of recession. That is Swastik Vihar, where property has risen steadily over the past three years, say brokers. A graph which others would only be too glad to follow.