Tuesday, March 17, 2009

Looking for Residential Property on Rent in Chandigarh?

The residential real estate market in Chandigarh is in a slowdown phase and with fewer transactions happening and values holding, the real estate action has shifted to the rental front. The rental market is especially active in Sectors like 21, 22, 34, and 35. The city is divided into self sufficient sectors and residential sectors are divided on the basis of plot sizes. “In the prime residential locations in Chandigarh, which include sectors 4 to 10, an old house with 500 sq. yard (1 Kanal) area is available at a rent of Rs 40–50,000 per month. In case of a new construction, the rent is about Rs 65,000” says Vipin Sharma, GM, PropertyVertical.com.

In the last one-and-half years, the residential rentals have seen an increase of almost 50 per cent.

The rental value in sectors like 21, 22, 34, 35, and 36 varies between Rs.10, 000-20,000 per month, depending on the size and location of the property. With developments on a fast growth rajectory, the demand for housing is expected to rise in the region. Currently, in Zirakpur price range varies between Rs.4, 000-6,000 for 2 BHK and Rs 10,000 for independent houses. Rental values in Zirakpur are 40% less than that of rents in Panchkula, which are Rs 7,000-10,000 per month for 2 BHK and Rs 15,000-18,000 for independent houses.

In Mohali rental scenario is exactly opposite as that of Chandigarh and Panchkula. Most of the rental properties are lying vacant as property owners have increased the rental values. Areas like Phase 7, 3B1 and 3B2, just like Sec 34 and 35 in Chandigarh, demands higher rental values due to its well-developed
social infrastructure, good ambience and quality of life, also these are quite in demand from corporate executives. On the other hand Sec-68 & 69 demands comparatively less rents. The rental value of a 10 Marla house varies between Rs 10,000-11,000, whereas it is Rs 8,000-10,000 of an 8 Marla house.

According to Vipin sharma, “2 & 3 BHK is the most transacted unit as rent is very reasonable and affordable. Demand for rental accommodation emanates mainly from the IT sector and other working professionals”. A lot of students also take up apartments on sharing basis especially in areas such as Sec 15, 20, 34, 35, 36 which are home to many colleges and institutes. Besides, foreigners and NRIs are also an important segment in tenants, due to the influx of many IT companies and therefore expatriates.

By Harsimran K. Kalra

Tuesday, March 10, 2009

Recession Effect: No Buzz in Shopping Malls

A mall not only offers a great shopping experience but is also a mine of business opportunities. But the pangs of recession are clearly visible on this mine of opportunities also. Fewer Footfalls, No more swanky shops, empty spaces, have snatched the sheen out of this culture. About a year back, malls were sprouting up in Chandigarh, Panchkula and Zirakpur almost on an everyday basis. Over 10 malls, shopping complexes and multiplexes were set to come up, the hottest destinations being Zirakpur Road. In 2007-2008, a whopping Rs 6,000-crore investment was estimated in construction of malls over the next two years.

A quick look in 2009 showcases a different scenario. Blame it on the economic meltdown, the festive spirit has not made shopaholics to flock malls and retail outlets in Tricity. However, Shalimar Mall, the first one to start operations, wears a deserted look. No retail outlet has started its operations as yet.

The loss of business forced the branded shops to look for solutions. Of course, not all stores concede a drop in business; whereas shop owners in other malls complain of no attract takers for the swanky shops. Even shops that have come up in such malls are awaiting buyers, forcing many to shut shops. Reasons like parking problem, expensive box office has lead to fewer footfalls in Centra Mall, giving trouble times to the shop owners.

“To attract the crowd, lucrative offers should be given to the shop owners of premium brands. Moreover, management could think over a short lease period, in order to provide the flexibility to them, so that they get ample time to establish their business. Establishing more chains like Big Bazaars and giving more opportunities to factory outlets of various brands would add a feather in the cap,” suggests Vipin Sharma, GM,PropertyVertical.com.

Senior Marketing Executive of The Bella Vista, Chetan Sood, claimed, “Around 20 brands have been finalised, which have started sprucing up their stores for launch, the recession has led to a definite slowing down of the entire process. Of the 64 shops at this mall, we are yet to find takers for around 10 shops.” Asserting that Bella Vista’s USP is “truly retail centric mall” he added, “The mall will have floors dedicated to a particular lifestyle category.” Sood added that the opening of the mall may be postponed to June or July this year.

By Harsimran K. Kalra

Friday, January 30, 2009

Real Estate Trends in Delhi

Residential Market Scenario:
The real estate market in the Capital has experienced large-scale as well as wide spread development in the last few years. Most of the residential construction in Delhi primarily constitutes of “Builder Floors” in the already developed areas. This is primarily due to the non-availability of land parcels in the city. After a long boom period in real estate market, the capital is facing overall slump in the property market. However, there are premium localities, which are not affected by the recession in global economy. Acc. To Mr. Manpreet Singh, Operation Manager, www.propertyvertical.com, “After seeing a downfall of 30-40% in prices of builder flats, there is no buyer willing to buy these properties. Whereas 20-25% declined has been noticed in the prices of plots, but the same situation prevails there also”. According to a survey report, held in Delhi, 61 per cent of 688 participants said they are willing to wait for up to 6 months. And 40 percent said they expect prices to fall further in the short term.

Contrary to the situation in some areas there are locations like Golf Links, Jorbagh, Sunder Nagar, Malcha Marg in South Delhi ; and Janak Puri, Punjabi Bagh, Rajouri Garden in West Delhi, where due to the non availability of sufficient supply, prices are stable. According to Mr. Ankush of Aggarwal Estates,”These luxury sectors have been perceived as recession proof. The capital values in Golf links and jorbagh is Rs.75,000-85,000/sq ft and in Maharani Bagh is Rs. 35,000-45,000/sq ft”. Chanakyapuri commands the maximum residential capital values of around 45,000-50,000 /sq ft. Mayur Vihar in East Delhi has seen the average capital values appreciate by over 100%since 2004.

Buyers have adopted a wait and watch policy so that they can pick houses in areas, where the rates are much in excess of their budget. According to Mr. Sahni, a property consultant in Janakpuri, “This is the right time to invest in properties as one can crack a deal in his favour. During this period one can easily get a 200 sq yard house in between 1.40-1.50 crores in Punjabi Bagh, earlier which was not possible”.

With the commissioning of Delhi Metro, the residential locations of Dwarka and Rohini have also experienced substantial appreciation in capital values where the values are in the range of Rs. 4,200-4,800/sq ft.

Commercial Market Scenario:
Delhi has clearly emerged as one of the fastest growing economies in India. The physical infrastructure in Delhi is counted among the best in the country and the state government is proactive in bringing contribution of private sectors to give a real realty boost in the state.

It is one of the most sought after destination for multinational companies, corporate business, investors as it provides world-class living standards and globally comparable business houses in the form of Business Centers and IT parks. Real estate business is growing at a speedy pace in this futuristic city of India.

Commercial Office Space in Delhi has been at a short supply since long and market players do not expect the demand to soften in the near term. Earlier if a company wanted to go for office space they generally looked at Connaught Place, Nehru Place, Okhla Industrial Area to name a few. But today new and quality developments have come up in areas like Jasola and Saket by developers like DLF, Uppals, Saluja Salcon, TDI and others.

Delhi’s commercial office space has been considered as recession proof as there is no effect visible on the prices though it has slightly hit the residential property market. Also the squeeze in the commercial property market has led to substantial gains for landlords and lesser across Delhi, pushing up rentals to unimaginable levels of Rs.100 to 150 per sq. ft and those who want to sell, are waiting for a good time, when they would get the apprised value of their properties that is after elections in March-April.

By Harsimran K. Kalra

Friday, January 16, 2009

Shifting Gears: From Sellers to Buyers market.

The real estate industry is shifting gears from a sellers market to buyers market. After four-five years of boom phase, real estate has begun to face the heat of the slowdown just like most other sectors of the economy. In the boom period Chandigarh properties were selling as fast as developers can make them! Both commercial and residential properties were in demand. But now prices have fallen as a rising number of sellers come under pressure to dispose of real estate assets in exchange for cash. A number of residential buyers have followed the wait-and-watch policy and are waiting a price correction before buying a property as the global economy faces turmoil and an improbable future. This has affected the demand of the real estate space, which is already at a very low level and further, this could also affect development plans of builders. “I’ll rather wait for another one year for the prices to go down further as I don’t want to take risk that today I’m investing in a property worth Rs.24, 00,000/- and after few days it dips to 20 Lakhs, so I just want to avoid the risk and want to wait until the market gloom in its proper shape”, says Chanpreet Singh Chawla, CTO of an IT Co., Mohali.

Although developers are cautious about admitting to price correction, the sector is witness to 15-20 per cent cuts already and there is potential for more. “Affordable houses should be constructed for the end users who want to go in for less expensive homes, as the rates on home loans have also been declined by the banks”, says Amit Sharma, a resident of Mohali. “In Chandigarh prices vary between Rs 60,000-75,000 per sq yard, even the smallest unit of 125 sq yard is not available in the specified home loan range and same scenario prevails in Panchkula and Mohali”, says Gurpreet Singh, Sales Manager, Online Real Estate Pvt. Ltd.

“Government should pour in some more money in the real estate sector for generating the demand and to ensure the smooth supply in the realty market”, suggest an official from the Estate Office, U.T. Chandigarh.

“Property consultants play influential role in converting any transaction. Developers assign their projects to authorized consultants and they quote prices according to their convenience, so there should be a proper channel and parameters to stop the exploitation of the genuine buyers”, proposed Ram Sinha, a resident of Sector- 48. Also developers should provide some facilities like, power back-up, parking, security, lift services; club membership etc for free of cost.

Buyer is the lead player in the current market scenario and is looking for change in the form of increase in transparency in the real estate market, simplifying land acquisition procedures, reducing stamp duties, devising a single-window clearance system and reframing development control rules to meet the present requirements and supporting infrastructure. The present situation call for some consolidation within the sector and perhaps the need to create an innovative scenario in the real estate sector that could support end users and as well as financially distressed developers to tide over.

By Harsimran K. Kalra

Friday, January 9, 2009

Boom & Bust of City Beautiful Real Estate

City Beautiful Reality sector assumed prime significance due to the city’s strategic location. The city shares its borders with the states of Haryana in the south and Punjab in the north. It is surrounded by Mohali and Panchkula. The boundary of Himachal Pradesh is also not too far from it, giving a vibrant glow to its real estate sector. Indian real estate is passing from a slowdown and the global recession has tighten its claws on the reality sector surrounding Chandigarh, whereas, prices in Chandigarh are on its climax and will remain stable throughout the year without showing any sign of downfall. “Though the price of properties on the outskirts of Mohali and Panchkula have come down up to 15-20% giving rise to the chances of any movement, the properties in the inner sectors have denigrated to 5-7%”, says Vipin Sharma, General Manager, Online Real Estate Pvt. Ltd. What can be the reasons of such a trend in Real Estate Industry and what future course it will take? Through this analytical review I try to find solutions to these questions for the real estate investors.

In real estate sector, housing accounts for a major component and is growing at a fast pace. Remainder consists of commercial office space, industrial space, shopping malls, hotels and hospitals. Growing nuclear families trend and rising income levels of middle class have contributed towards soaring housing demand. This trend ultimately leads to the rise in property prices in Chandigarh and vicinity. As the trend of economics, demand is high and so does the prices is high. Also availability of cheaper home loans makes it easier for the buyer to invest in real estate. But, worldwide global recession resulted in the hike in interest rates and this further impacted the plans of salaried class, who was earlier dependent on the home loans, thus, hampering their investment plans.

According to R.S.Walia, a Property Consultant, Chandigarh, “prices are on an all time high in Chandigarh, touching the skyline and are more than the prices in US, Canada and Australia. Due to this factor NRI buyers are stepping back and are more willing to invest in these countries”.

But the situation in Mohali and Panchkula is exactly opposite as in Chandigarh. Supply is high but the demand is low. Excess availability and unplanned growth leads to supply in abundance. But the government’s move to cut the bank rates has provided some respite to the sector. Government’s encouragement package and RBI’s move allowing banks to provide special treatment to realty companies may provide a breather to the sector. Also with the public sector banks slashing the home loan interest rates to boost the struggling realty sector would prove beneficial for the sector. “The situation is improving after the correction in Government policies and reduction in interest rates and movement in these two districts has been noticed as there are more sales queries these days”, claims B.S.Kohli, Kohli and Kohli Consultants. Also Government should regulate the policy of registration of the consultants in the city, which will indirectly affect the prices, claims an official from the Estate office, U.T. Chandigarh.

Though in the tricity region, one could not find any property in the suggested price range, but it would invigorate movement of property in the suburbs like Kharar, Zirakpur and Derabassi. Residential plots and old constructions are easily available in these areas in the suggested bracket and more specific for the investors the best investment opportunities are in Mullanpur and adjoining area which has recently come under planned development as the Punjab Government recently issued its master plan said Rakesh Gupta, Solitaire Properties Pvt. Ltd.

The buyers have adopted a wait and watch approach to grasp the best opportunity with the hope of reduction in loan rates. But this is the considered as the right time for the genuine buyer to invest in Chandigarh as there are higher possibility of good negotiations as compared to the outrageous prices in the year 2005-06, and was unimaginable for them to invest in the right property.

By Harsimran K. Kalra