The Reserve Bank of India’s move to cut key rates for the first time in three years by a sharp 50 basis points may kickstart property transactions in Tricity, which have seen a major slowdown over the past year.
The correction in residential property prices in Chandigarh, Mohali and Panchkula has ranged from 15 to 25 per cent during this period. Property dealers prefer to call it a “stable market” — when prices of marlas and kanals have not been going through the roof.
Guranchal Sethi, a property dealer based in Sector 35, asserts that the correction had to come in after prices had become unjustifiably high. “Every five to six years, realty prices in Tricity take a big jump, and then stabilise for a while. But the prices never really fall, because the supply is limited and the takers are always too many.”
The price correction is visible across the city. Prices of houses in northern sectors which earlier went up to Rs 11.5 crore are now down to Rs 10.5 crore. In southern sectors, Mohali and Panchkula too, the drop is proportionate. Sethi insists the current prices are likely to continue for the next two to three years.
Salil Taneja, a real estate investor based at Mani Majra, is pinning his hopes on announcements made by top banks that interest rates may go down following the RBI move. “This will bring in liquidity in the market and set the ‘buying wheel’ in motion,” he said, adding that even a correction of 25 per cent was insignificant because about three years ago, the rise in property prices in Tricity was as high as 200-300 per cent.
Sudeep Sachdeva, a property dealer based in the city, said the last one year had seen a decline in the number of transactions. The stability in prices had been seen on the outskirts like Zirakpur and Mullanpur too.
Realty observers agree that the hike in prices was created by investors, and not the end-users. “Customers are waiting for prices to come down more,” said Vijay Kaushik, a property dealer based at Mani Majra. He added that prices were at a standstill now in the Tricity, and also the townships coming up in the vicinity.
There has been no respite in the rentals though. While an annual increase of 10 per cent is expected, Guranchal Sethi said in some sectors the hike had been higher. “Landlords are charging Rs 50,000 or more for a one-kanal house, depending on the location and construction,” he added.