NGT put a spoke in the wheel of market growth

With the National Green Tribunal (NGT)  banning  constructions in core and green areas in Shimla town and the sword of building restrictions hanging dangerously, the real estate market remained sluggish in Shimla and other famous hill stations like Manali, Kasauli and Dharamshala in 2018.

The prices of  constructed houses and flats shot up in Shimla and other hill stations, but there were few buyers as construction  of only two-and-a-half storeys on costly land did not seemlucrative.

The government was contemplating to challenge the orders of NGT in the High Court, but no petition has been filed till date. After demonetisation, the builders, who had purchased costly land, are facing acute cash crunch and scrapping of retention police and restrictions imposed on regularisation of illegal constructions, have worsened the situation for them. 

A large number of sellers are hoping that the government would take effective measures to bail out the owners of illegal buildings and shelved their plans, while the buyers are not keen on purchasing plots.

However, the resale value of constructed commercial properties has gone up phenomenally as buyers have no option. Few properties are available for sale in prime locations and owners are calling the shots. 

The number of registries in rural area has been slashed by 40 per cent in 2018 as compared to those last year. “In order to stop haphazard constructions and mushrooming of buildings in Special Area development Authority (SADA), we are very cautious in approving the building plans”, says Deputy Commissioner, Shimla, Amit Kashyap. 

However, the NGT orders have proven to be a silver lining for the builders who had already constructed the flats but were not getting buyers. As construction of new flats would not be a lucrative proposition due to restriction of height, the prices of flats are set to go up, said a builder Harish, constructing flats in non-restricted zones.

Further, the High Court orders to close down the hotels running illegally at Manali, Kasauli, Kangra and other places also came as a blow for the real estate sector.

A modern satellite township coming up at Jatia Devi near Jubbar Hatti airport (Shimla) over 388 Bighas of land and state Public undertaking, Himachal Urban Development Agency (HIMUDA) have signed a memorandum of understanding (MoU) with the Singapore government to build a modern township aimed at decongesting the capital city, but the project is moving at a snail’s pace.

Solan   

With the National Green Tribunal (NGT) restricting the height of buildings in the key Kasauli Planning Area (KPA) and  the high court monitoring the case of unauthorised constructions in Solan town, the realty sector remained grim all through the year in Solan district. Though the ban imposed on constructions in the KPA by the NGT was lifted in October, a slew of restrictions dissuaded realtors from venturing into new projects. The construction activity  has, however, shifted to  the precincts of the KPA where land prices had started soaring and prime land was available for price ranging between Rs 3 lakh per bigha to Rs 5 lakh per bigha.

No new realty project saw the light of the day while the sale of commercial properties remained sluggish as sellers eagerly awaited sale of their built up flats and commercial space in Solan.

Several commercial properties in the state’s industrial hub of Baddi-Barotiwala-Nalagarh continued to remain unoccupied this year. Construction of some hotels, which had began years ago, remained stalled.

HIMUDA  has kick-started its new project at Dharampur where it is offering flats  ranging from 36.96 sq m to 250 sq m in price range of Rs 17.5 lakh to Rs 19.6 lakh. But a majority of the flats are yet to find buyers.

Dharamsala

Property prices remained high in the Dharamsala region even as buyers remained elusive. In Upper Dharamsala that includes Mcleodganj, Bhagsunag and Dharamkot prices sky rocketed about five years ago. Even the official registration rate of properties located along the road was about Rs 1 crore per kanal. However, after demonetisation there has hardly been any sale or purchase of land in this region. People are holding on to their properties instead of selling these at lower prices.

In lower Dharamsala area also the prices of prime properties, including those in the Civil Lines area, continue to be high due to limited choice. The rates of properties in fringe areas of Dharamsala city, including Rakkar and Khaniara, also increased in the past few years as more and more commercial and residential properties came up here.   

Kullu / Mandi 

The real estate business here witnessed a downfall in 2018. The prices of land had fallen in Kullu and Manali area as the number of buyers decreased. Many of the real estate projects of the region also faced a shortage of buyers. The buyers have shown interest in  Tirthan valley in Banjar subdivision of this district, but Section 118 of the HP Tenancy and Land Reforms Act is a major hurdle in attracting buyers from outside of the state. A local real estate broker said that overall market rates of land had come down in 2018. Some of the major real estate projects in this district are yet to see the light of the day due to receding interest of buyers. Many of the plots in the two colonies of HIMUDA at Bajaura found no buyers for the price being demanded by the owners.            

— With inputs from Bhanu P Lohumi, Ambika Sharma,  Dipender Manta and Lalit Mohan