It would be wise to buy now into the Panchkula real estate market before residential properties become too expensive for the end-user, advises Munieshwer A Sagar
In the Chandigarh tricity area, Panchkula's real estate market has taken the number two slot, both in terms of living conditions and return on investment. Chandigarh maintains its number one position. The trend in Panchkula city is one of strengthening demand and appreciating prices.
Competition from alternatives, such as areas in the city's periphery, has diminished and this too is fuelling realty growth here.
Experts say Panchkula is chiefly a secondary market, and that's where the growth is coming from.
This claim is supported by the lack of new projects in the city, which can also be viewed as a weakness of the Panchkula realty market.
Apartments After a gap of three years, prices of apartments are appreciating. “After investors withdrew from the market in 2007, the segment that was worst hit in the Panchkula real estate market was the apartment segment. The prices in this segment fell between 10 per cent and 30 per cent. Consequently, there were very few actual transactions taking place.
But now, end-user interest has been revitalised in the apartment segment, and investors are also buying apartment properties in Sector 20 and the Mansa Devi Complex,“ says Mandeep Singh, a Panchkula-based realty consultant.
Concentrated in two distinct parts of the city, the Mansa Devi Complex (MDC) and Sector 20, apartments fit into the affordable category. In MDC, end-user demand is strong, and proximity to the Chandigarh Technology Park is also attracting investors to the area. In this area, prices hover around R3,300 to R4,300 per sq ft. Two years ago, the same property was available at R3,200 to R3,800 per sq ft. Prices are comparatively lower in Sector 20, which has more than 100 group housing societies. Prices in this sector have risen from R2,800 to R3,600 per sq ft in 2008-09 to R3,300 to R3,800 per sq ft in 2009-10.
“The end-user is driving demand in the market. The investor, though he has entered the market, is yet to make a big impact on the overall market direction and momentum.
End-users fear that the prices are set to increase and now is the best time to buy rather than entering the market when investors have started dictating market prices,“ says Rajender Malik, a Panchkula-based real estate expert.
Market experts say that price movements are also being observed in private builder-apartment projects located in Sector 20.
“Private builder projects were either stalled or the pace of construction was very slow during the last two years. Now, however, there are signs of increased construction activity in these projects and we expect an increase in demand for these projects, as well,“ says Malik.
Independent houses and plotted development Independent houses, or kothis, are leading the market growth in the city.
“The demand and growth of independent houses in the city have always been strong. Even during the stagnation of 2008-early2010, price corrections in this segment were minimal, particularly when compared to the apartment segment. When prices began to fall during the time of stagnation, most sellers postponed selling their inventory,“ says Prakash Shukla, a property consultant based in the city.
In sectors 7, 8, 9, 10, 11, 12, 15, and 16, where only old plotted houses are available, prices are in the range of R44,000 to R50,000 per sq yd. The past two years saw severe pressure on prices due to low demand. However, price correction was limited to 5 per cent to 10 per cent only, which is negligible when compared to the price appreciation that took place in the boom years.
Then, prices rose at the rate of 100 per cent to 200 per cent, say Panchkula realty experts. In areas like Sector 21, prices range between R38,000 and R42,000 per sq yard, says Naresh Gupta, a property dealer based in Sector 20.
Prices in HUDA sectors 23, 25, 26, 27, and 28, are within the affordable range of R28,000 to R30,000 per sq yd.
Earlier, end-users looking for affordable housing were primarily looking for a house in the Mohali periphery, adjoining Panchkula. However, with infrastructural issues in those areas, more and more end-users are exploring the above sectors of Panchkula.
Experts believe that the city's realty market is a very good investment option.
“The returns on investment in the city are second best only to Chandigarh in the tricity area. In the coming months, we expect prices to appreciate. So, for the end-user this is the best time to buy. For the investor, returns are expected to be good both in the short and medium terms,“ says Rajan Gupta, a local realty expert.
