THE ALREADY struggling real estate market in the region has suffered another blow after demonetisation. Builders are finding it difficult to sell their properties, including flats and plots, in different housing projects in the district. Some of the new projects have been stalled too.
The queries being received by the builders from prospective buyers are almost negligible. Some builders are planning to revise the rates of their properties to attract buyers. Some small projects are coming up in the peripheral areas in the district and the new flats are only adding up to vacancy. According to experts, the number of vacant flats in Derabassi, Mohali and Kharar is 10,000. In the next three years, if all the projects are completed then the number of vacant flats could go up to 20,000.
According to information available, there are a total of 21 mega housing projects approved by the Punjab Urban Development Authority (PUDA), including JLPL, Omaxe, TDI and Emaar MGF in the district. Out of these, 18 projects have been completed while work on three mega projects is still in progress. Then there are nine licensed colonies approved by the Greater Mohali Area Development Authority (GMADA).
All these projects and colonies are situated in Mohali, Kharar, Mullanpur, Zirakpur and Derabassi. There are some projects which are not approved either by GMADA or PUDA. Some such projects are ready to start sale of flats but they do not have the permission of GMADA to do so. Around five months ago, GMADA also blacklisted 19 such unlicensed colonies.
According to Mohali-based property consultant Shailander Anand, there are around 35,000 flats of various sizes in all the approved housing projects of GMADA and PUDA. Out of the total flats, the majority are in Mohali and Kharar. There are around 10,000 flats at Derabassi and Zirakpur, and around 25,000 flats in Kharar and Mohali areas.
In Derabassi and Zirakpur, Anand maintains, there are around 3,200 flats which are lying vacant and in Mohali and Kharar area, the number of vacant flats is around 7,000. He terms the vacancy very high which means that people have shown less interest in the projects despite good connectivity of roads.
“People who are working in Chandigarh are those who have bought flats at Zirakpur. Kharar is less suitable for people, due to which the number of vacant flats in the area is higher,” he says.
Yadvinder Sharma, a Derabassi-based builder, asserts that the market has been suffering since 2013 but after demonetisation, “we feel that the business is hit hard. The small projects are the worst sufferers as they could not afford to keep their flats vacant and they have not good marketing teams as the mega projects have”.
“In Zirakpur and Derabassi, there are around 10 small projects. The vacancy of flats is high in these projects. The small builders could not sustain the cost and people have stopped coming with queries. Prospective buyers are now waiting as they are expecting that the rates of the properties will go down which is a very bad sign for the industry as there will be no flow of money,” he says.
Ashwini Sharma, a Mohali-based builder, insists that many projects in Mohali were sold like hot cakes till 2010 but thereafter the market slowed down. In the last three years, it has totally shattered. There are a number of projects around Mohali and Kharar but after 2013, fewer people have bought the flats.
“In big projects like TDI City and Sunny Enclave, flats were sold as these were new projects but now there are many projects on Kharar-Landran road and on Kharar main road, including the airport road, where flats are lying vacant,” he says. Ashwini points out that the builders have high hopes from the new industry which is coming up in Mohali but it will take a long time to develop.
“The cash flow has totally stopped. Although buyers were not coming in the previous years, we were hopeful that flats will be sold out slowly but now we feel that it is very difficult for us to cope with this cash crunch,” he says.
Sumeet Pahwa, a Kharar-based property consultant who has sold many flats in different projects in the past, asserts that earlier they used to get three to four queries every day and near festivals, the number of queries will go up to 15 to 20 every day but in the last two months, they have received only three queries.
“I suggested to some of the builders to revise the rates. They are still hopeful that they will get buyers, but I don’t think so. As per my estimate, the number of vacant flats will be more as some new projects are also ready on Kharar-Kurali road. We have spoken to a number of buyers. People do not have money to invest now, so the builders have to find solution themselves,” he says.
Pahwa points out that in the next three years, around 15 new projects would be completed and the number of flats would be around 10,000 to 12,000. The Builders’ Association hopes that good times will return. President of the association and Mayor Kulwant Singh admits that there is a problem in getting buyers but they are still hopeful that the builders would be able to sell their properties.
“In the last few years, the road connectivity has improved a lot, the international airport has come up and big IT companies too are coming up in the district. The work on Kharar flyover has started. All these factors are good signs for us. But it’s true that small builders are struggling,” he says, adding that there is no plan to revise the rates as they are waiting for things to get normal. The rates can go down but there will be nominal changes.