John

If you are looking for a house in the hills, you could try your luck at Rishikesh, Uttarakhand.

A dip in prices of apartments - to the extent of 20-30 per cent - will allow you to get better value for your money today than one year ago. One year ago, builder apartments in Rishikesh cost Rs 2,400 per sq ft to above Rs 4,000 sq ft. Today the rates have come down to Rs 1,700 per sq ft to Rs 4,000 per sq ft.
While prices of apartments have tumbled, those of plots have increased, chiefly on account of lack of availability. In an upmarket locality such as Veer Bhadra Road, the price ranges from Rs 10,000-20,000 per sq yd. In less upmarket areas such as Laxman Jhula and Shyampur, the price is Rs 4,000 per sq yd. A year ago, it was Rs 3,000 per sq yd.

What accounts for the current slowdown in Rishikesh's real estate market?
The most important factor is that speculation by investors had driven prices up too high. Earlier, rates of apartments had gone up too high, so a correction was bound to take place. Stringent approval norms from the state government have also dampened sentiments. The rules say that people not domiciled in the state cannot buy more than 250 sq yd of agricultural land. As a result, developers from outside the state are finding it difficult to get approvals. Also, currently conversion of land use from agriculture to residential has come to a complete halt.

In the last couple of years, Rishikesh's real estate market has attracted a lot of invest ment from outside. The most important factor driving demand is, of course, its religious significance. What also attracts buyers is the salubrious climate and the scenic location of many of the builder projects coming up here. Says Sanjeev J Aeren, MD of the AEZ group, which is developing the most expensive project in Rishikesh, a residential township called Aloha where flats are selling for Rs 4,000 per sq ft in the secondary market: "The holy Ganges runs near our project. Our project also offers buyers a panoramic view of the mountains."

A large number of buyers are NRIs. There are also buyers from Chandigarh, Ludhiana, Jalandhar, Haryana and Delhi. Many of these buyers want second homes so that they can spend their weekends in Rishikesh's cool climates. Supply has followed quickly in the wake of demand. Within the last one year, about five-six developers have begun construction work on their residential projects. In addition to the Delhi-based AEZ group, you have players like the Aradhana Group, which is coming up with two projects, Ganga Vatika I and II. BK Associates which is coming up with a project called Rishi Avenue, the Shiv Ganga Group, and the Tarika group.