Reality check: Disasters in Uttarakhand create residential realty demand in plains

Prices have shot up, say property dealers, but commercial segment languish

Unpredictable weather, which had led to several deaths and destroyed properties, seems to have forced people living in the hilly areas of Uttarakhand look for safer locations in the plains.

A large number of people are looking at buying houses in the safer zones of Dehradun and other cities in the plains. This could lead to a wave of migration from the hills. Cities like Rishikesh and Haridwar are also in high demand as far as the real estate business is concerned.

On June 16-17 last year, a flash flood had caused widespread devastation in Uttarakhand. Terror had struck parts of the hill state this monsoon season too. This has led to a spurt in the real estate market, which saw a slump 2008.

S Jyual, a property dealer, said property prices in areas such as Dalanwala have shot up to Rs 4,000-5,000 a sq yard. Another developer said: "We are seeing a demand for flats and plots in Dehradun, and mostly from people living in hills. This could be due to the June flash floods in Kedarnath and other areas."

Areas like Sahastradhara are seeing an appreciation in property prices. Private developers are building colonies in Shimla Bypass, Sahastradhara, Mussoorie Diversion and Raipur in Dehradun. Some colonies are being developed near various rivers in the Pachhwa Doon area. Builders are focusing on the residential sector as there is hardly any improvement in the commercial space.

Experts said new realty investments were not pouring in to the hill state. Only smaller players are investing in Dehradun. But high-end flats still cost between Rs 1 crore and Rs 5 crore in posh areas such as Dalanwala. "There is a good demand in this segment," said V K Dhawan of the Sara group, which is entering the real estate business. Dhawan said he also plans to enter the hotel business. "We are planning to construct a four-star hotel with 117 rooms at the Mussoorie-Diversion area." Sara also plans to construct 100 service apartments, 48 apartments and eight penthouses.

Prior to the recession in the market, new amendments in land laws, high stamp duty and circle rates had virtually put a dampener on the property business in the state. Official estimates said though there has been a steady rise in the revenues from stamp duty and registries, property rates have failed to appreciate.