Mumbai: Parliament on Tuesday approved a resolution abrogating special status accorded to Jammu and Kashmir under Article 370 of the Constitution. It also cleared a bill to split the state into two union territories of Jammu and Kashmir and Ladakh.
The scraping of Article 370 and Article 35 (A) has debarred non-residents from buying properties in Jammu and Kashmir, has presently opened up the hope that outsiders may invest in undaunted property in the union territory.
Generally high property valuations, non-transparency, lack of regulation and the willingness to sell land or properties will be the key challenges, now Kashmir at last opened up as a real estate destination, for individuals from outside to invest in the property.
According to pricing trending in 2019, property rates in Jammu and Srinagar have remained constant with no upward movement. The average sale price of 24 properties in Srinagar listed on its site, mainly independent residences at Srinagar is Rs 2.5 crore, while the starting price is Rs 1.60 crore, as per the realty portal Makaan.com.
The residential project ‘Adarsh Palm Spring’, Humhama locality, Srinagar, in central Kashmir, ready apartments are priced at around Rs 65-85 lakh.
These prices in Srinagar are comparable to any larger property market like Bengaluru or Pune.
Pricing, however, is not the main concern, said property analysts.
“A property market which has so far operated in a closed environment like Kashmir, transparency and valuations would be an issue. Even if there was a buyer, would there be willing sellers who would agree to new, discounted valuations, because a valuation mismatch is bound to then happen. It will remain a turbulent market for some time, until there is digitisation and systems in place," said Gulam Zia, executive director of property advisory Knight Frank India.
“While Srinagar is predominantly a seller’s market, and land and property title records may be a huge issue during transactions, the Jammu market is slowly diversifying into smaller apartments from larger, independent homes to address demand,” said Ajay Jamwal, owner of Jammu-based Om Shakti Builders and Developers.
“There are newer projects coming up where homes are priced at Rs 45-55 lakh but the bulk of the inventory is larger homes, above 1700 sq ft or so," Jamwal said.
The circumstance of opening up new real estate markets within the nation presently, may not meet with adequate enthusiasm given the overall lukewarm opinion in the sector.
As per the experts, in a conflicted and sensitive territory like Kashmir, it will take time for interested investors or buyers to step and step up momentum for any real estate activity.
“Property prices and valuations tend to be irrational before an regulation comes in. In the pre-RERA era, that was the case in most of our cities. Real estate momentum will entirely depend on the comfort investors get from both political stability and economic growth in the region. We believe that outskirts and peripheral areas will open up first and see activity with new supply coming in," said Pankaj Kapoor, CEO of Liases Foras Real Estate Rating and Research Pvt Ltd.