An end-user looking for an affordable home, Rakesh Garg, a Chandigarh-based IT professional, has shifted the focus of his house hunt from Chandigarh to the periphery. "I started looking for a house in Chandigarh in December 2009, but suddenly the prices started to increase - almost doubling in a few months. A middle-income person like me cannot afford to pay Rs 2 lakh to Rs 3 lakh per sq mt for a property. Even most areas in Panchkula have gone beyond the affordable range. Now, the only option is the periphery," says Garg.
Too Expensive In Cities
Prices have appreciated 50% to 100% in Panchkula and Chandigarh. In Chandigarh, say local realty experts, prices almost doubled in 2010. Since affordability was already an issue; the rise pushed the end-user beyond the city limits.
"The demand revived in 2010. Prices started to rise after a gap of almost three years, and continue to move up," says Mangat Rai, a city based realty consultant.
Even before the current bullish phase, end-users were finding it difficult to buy a house in the city due to very high property prices. Now it has become impossible. Mohan Dutt, a local realty consultant says, 'A kanal house in sectors 8 and 9 was priced at around Rs 1.65 lakh per sq m in the beginning of 2010, which almost doubled to Rs 3.2 lakh per sq m between March 2010 and March 2011. Even in the apartment segment, prices increased by 70% to 80% during this period."
The best alternative to Chandigarh in terms of infrastructure and quality of life and prices is Panchkula. Prices here too, however, have risen by 50% to 60% and gone beyond the reach of most end-users. Anil -Gupta, a prospective buyer and city resident, says, "We explored Panchkula but it is also too expensive now. Plotted housing is not affordable and even apartments have become very expensive in the last one year."
Vivek Sharma, a city based builder and developer, says, "Prices in sectors such as 6, 7, and 8 in Panchkula rose by around 60%. In other sectors - like 25, 26, 27 and 28 - prices increased by around 40%. A kanal house in Sector 6, priced at around Rs 3 crore, is now available for around Rs 5 crore to Rs 6 crore, depending on the location. In the apartment segment, group-housing societies in the Mansa Devi Complex (MDC) witnessed the sharpest price appreciation in the city by over 70%: In Sector 20 too prices rose by 40% to 50%. A three bedroom apartment in the city is now available in the price range of RS 55 lakh to 75 lakh:”
Towns like Zirakpur in the periphery were low on the demand list of the end-user. "There were, and still are, serious infrastructure issues with the peripheral towns like Zirakpur. Lack of proper sewage disposal, narrow roads, haphazard housing growth, lack of garbage disposal, drinking water and electricity supply problems made the periphery very unattractive for end-users like us. We are living in Chandigarh for the past 20 years and take such facilities for granted in the city. So, it was natural for buyers like us to avoid Zirakpur, which could once be termed as an urban slum", says Dilraj Singh, a resident of Chandigarh and a prospective buyer.
However, this town is now attracting buyers. "The housing market in the periphery, which experienced a severe slump between 2007 and 2009, has revived and is witnessing fast price growth. In Zirakpur, plot prices have almost doubled in the past one-year. Similar, though lesser rates of growth have been recorded in area like Kharar and Dera Bassi", says Manoj Sharma, a realty consultant based in Zirakpur.
The end-user demand has increased in these areas.
"Finding it impossible to buy a house in Chandigarh and Panchkula, end-users are moving to the peripheral towns. The presence of national and international developers in Greater Mohali and Pinjore has also improved the quality of housing available in these areas. Meanwhile, the prices are still in the affordable range, varying between Rs 12,000 per sq m to Rs 35,000 per sq m. There are new residential products such as independent floors also available", says Maninder Singh, a Mohali-based real estate expert. The price difference between cities like Chandigarh and periphery areas like ZirakPur is the main attraction.
While in Chandigarh, land is valued at Rs lakh per sq m, in the periphery it is almost one-tenth of this at around Rs 30,000 per sq mt, and in some areas this price gap is even bigger.
Main Cities Gain, Too
The recent positive growth in the periphery had also impacted the property scene in Chandigarh and Panchkula.
"Investors stuck with their investments in the periphery were able to exit and earn good returns. Most of them have reinvested in main cities, Chandigarh and the periphery," says Sharma. Realty experts say the major movers of realty prices in Chandigarh and Panchkula are investors. The rate of price appreciation in Chandigarh and Panchkula is much higher than most of the peripheral towns, so, for the investor it makes sense to focus on these cities. This is what has happened in "the last one year, say realty experts.
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