Stagnant market proves ideal for a common man
Builders and property dealers now concede that the stagnant real estate market in the state proved to be a boon for common man in 2018. End-user emerged as a king even as the prices remained stagnant and completion of projects remained slow. All major towns of the state, including Mohali, Ludhiana, Jalandhar, Amritsar, Patiala and Bathinda have a number of ongoing projects, but the construction pace remained slow in 2018. Industry mavens claimed that the projects where a majority of buyers were investors were the worst hit, while developers of affordable projects with end users as buyers were the ones completing their projects. For example, the Alpine Residency Society, Zirakpur, that is a cooperative society of professionals has 94 out of 96 flats occupied, whereas Silver City, also in Zirakpur, built more than 12 years ago, has a large number of unoccupied flats despite its prime location. Reason being that most of the buyers of this project are NRIs. As Ritu Sharma, a nurse in a private hospital, says, “Good construction with all basic services has made luxury an attractive investment for us as well”.
The President of the Punjab chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI), Kulwant Singh, says, “Tax on the rental, on one hand and increased bank loan rates are proving to be a deterrent for those who had invested in property anticipating hefty profits. At the same time timely payment by genuine investors leading to timely completion of projects is allowing good investment.”
“In 2018 there was no linear growth in sale or occupancy of property, both residential and commercial”, says Bhupinder Singh, a leading property consultant from Patiala. The price of property in Patiala was largely governed by location, connectivity and development of the area in 2018. The market however, remained stagnant as a majority of owners held on to their assets in anticipation of a revival.”
Experts feel that the demonitisation has proven to be a deterrent for a big chunk of investors who were investing in property to park unaccounted cash.
Punjab has between 7,000 and 8,000 unapproved colonies. Nearly eight months after the new regularisation of illegal colonies policy rolled by the Congress government, only 33 developers have applied for regularisation, a PUDA functionary said. Political backing enjoyed by builders has been the main reason for the ‘failure’ of this scheme.
The Real Estate (Regulation and Development) Act or RERA makes it mandatory for all commercial and residential real estate projects where the land is over 500 square metres, or eight apartments, to register. Besides, all new constructions, all ongoing construction is also required to get a completion certificate. “Projects in this category have come up with the required permission. However, registration with RERA, on completion of works, is pending. On ground, only 600 parties, including ongoing projects, have registered with RERA till date, which is far below the expected number of nearly 1,500. There is a poor check mechanism on ground. Sanjiv Gupta, member, RERA-Punjab, says “We have given a last opportunity to developers to register. Show cause notices will be issued to a large number for non-compliance.”