It's a slow turnaround, but the real estate market of Shimla is finally looking up, says Munieshwer A. Sagar
Realty in Shimla, the capital of Himachal Pradesh, is showing some signs of recovery after a gap of at least four years. The last couple of years for the city, popularly known as the 'Queen of Hills', were the toughest in terms of stagnation in the market, followed by price correction.
The city has struggled to attract investors in the residential segment during this period. The investment returns in the hill station have been falling consistently for the last four years, and it is only now that we see some change and for the good in this trend, says Prakash Kashyap, a local realty expert.
Price status the price of 'good' properties in prime locations (like hilltops with driveways) is around Rs 10,000 to Rs 14, 000 per sq yd. In the more congested areas and within the main city prices vary between Rs 6,500 per sq yd and Rs 11,000 per sq yd.
The built-up flats are comparatively cheaper.
Three supplier options are available for the investor and the end-user to choose from -
private builders, housing societies, and the Himachal Pradesh Urban Development Authority (HIMUDA). All three offer products in a similar price range, which is between Rs 1,600 to Rs 2,000 per square feet, depending on location, quality of construction and image of the seller. Jeevan Sharma, a local property consultant, says, HIMUDA's threebedroom flat of 1,550 square feet area is available for around Rs 28 lakh to Rs 35 lakh. Some recent HIMUDA projects include a residential project at Chota Shimla, near the Civil Secretariat offering 165 flats at Kasumpti and 24 dwelling units near the Bishop Cotton School, New Shimla.
These offer singleto three bedroom flats, going for Rs 8 lakh to Rs 35 lakh. Pattern so far Supply in the recent past had overshot demand in the city. Availability of flats has increased in the past few years in the New Shimla area, with HIMUDA adding more products, and with the entry of local private builders. Says Ranbir Singh, a city-based property expert, For the last four five years the city realty was stagnating or struggling with falling prices. Except some prime locations, the general realty trend was very negative.
According to Naren Rana, a
local property dealer, The investor community, especially from outside the state, almost disappeared during the last four years.
Also, the number of people looking for holiday homes in the city had gradually fallen.
This factor of decreasing demand was compounded by the increase in supply, especially in the New Shimla and other peripheral areas of the main town.
Prices in the hill station fell by around 20 per cent to 30 per cent during 2008-2009.
The trends are changing now thanks to some 'good locations' in the city that are generating good returns for an investor.
Says Amrinder Singh, an investor from Punjab, the Right location is key for generating good returns here. The right location mainly refers to certain strategically located properties (in pristine surroundings). Demand for such properties is high among the high spenders from Delhi and Punjab. The trick is to tap into this market segment. Stubborn infrastructure problems The infrastructural problems are the biggest impediment to the realty growth in the city. How can one expect realty growth in a city with severe parking problems, drinking water issues and congestion, asks Deepak Shekhawat, a local resident.
Sachin Kaushik, a local realty broker, echoes what realty experts and city residents have been saying.
The parking problem has increased within the main city over the years, discouraging prospective buyers from investing in the area. The upcoming areas could have gained at the cost of the main city, but those have their share of infrastructure problems too like the absence of good connecting roads, proper water supply, and efficient sewage system, Kaushik adds What to expect Though the market is reviving, yet for the investor it means a mediumand-long-term wait before it recovers fully. No short-term miracles look likely to be happening. < a href= http://www.zameen-zaidad.com/real-estate-shimla.aspx> Investing in any category of property, whether public or private, is a tricky game. Not only location, but also issues like approach road, parking space, drinking water availability, etc, have to be carefully examined before an investment is made, suggests Kaushik.
Investors, particularly realty investors from outside the state, are focusing on the neighbouring area of Solan district for much of the investment. The general suggestion from the realty experts is to explore fully the Shimla realty market before making an investment -even though the market is looking up. Price appreciation, and consequently, investment returns for the investor are not going to be on a short term basis, say experts.
Courtesy by: htestates Dtd: July 17, 2010
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