Real Estate Chandigarh

Residential and Commercial properties in Chandigarh..

13 December 2006

Up, up and rising

The real estate sector in India is on an upturn. In last 24 months, there has been an unprecedented growth where overall market has witnessed a 35 to 40% jump in capital values. Research estimates have it that the real estate market is expected to grow from the current $14 billion to a $102 billion in the next 10 years.

Forget the sizzling metros, even cities like Mohali,Chandigarh , Chennai, Rudrapur, Meerut, Pune and Kolkata have seen a price rise of 30 to 50% in the last one year. So what’s driving the realty market, specially in tier II & III cities? And are the prices real or there will be a correction in the market? Says Sanjay Chandra, MD, Unitech Group: ”The boom in the Indian real estate market during the last few years is a result of a number of positive macro and micro factors.

The macro factors are driven by the spectacular economic growth resulting in growing incomes as well as low inflation and interest rates. The micro factors include growing aspiration levels, availability of better quality real estate and a far wider range of choice for the same.”

The dynamics, however, seem to be changing on the ground now. There has been a 10-15% dip in real estate capital values in small cities in the last couple of months. And while some industry pundits attribute this to lesser number of transactions in some pockets, others say that this was expected in a market dominated largely by investors.

Says Kamal Taneja, MD, TDI Group: ”In certain locations across India, the residential market is witnessing a rationalisation of capital values because of which the market is finally establishing price thresholds. This trend is visible essentially in select locations, where new supply is being released in the market.
This additional stock will help feed the current demand and act as a stabilising factor to the continuous spiraling of values, over the next 8 to 12 months.” The huge disparity between the expected sellers and buyers price that was visible in the market over the last few months is dissipating, with an anticipated stabilisation of capital values, he says.

Developers, however, attribute it to uncontrolled land prices. “Land is our basic raw material. I do not rule out some corrections in the property market, but then developers can hardly do anything, given the prices most land owners have been quoting in tier II & III cities,” says Dr Devender Gupta, MD, DGS Realtors.

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