NEW DELHI: Want to buy a house in Jammu & Kashmir but were unable to because of the erstwhile state’s special status? Now assuming one can finally take the plunge as the realty market there is now open for non-residents. But is the market really open?
Article 35A, which has now been abrogated, allowed the Jammu and Kashmir legislature to define permanent residents of the state and only those who were eligible could purchase land or property.
Now, following the reorganisation of the state into two union territories – Jammu & Kashmir and Ladakh – people from other states are eligible and keen to buy immovable property.
Here are the things that one should know before purchasing any property in Jammu & Kashmir:
Procedural
steps
Following the abrogation of Article 370 and
Article 35A, Jammu & Kashmir shall now be treated like any other state/UT
in India. All standard rules and regulations of the Central government will
apply there too. However, a state RERA policy must be formed to make the
procedure and rules explicitly clear.
Anuj Puri, Chairman – ANAROCK Property Consultants, says that the region will have to formulate its own RERA policies, which may not be similar to other hill states that have their own respective laws. Without the benefit of regulation, the entire question about property purchase remains wide open as the government has decreed that property transactions need to fall under RERA ambit.It is in the early stage and the investors must await the announcement of a regulatory body governing real estate in the region. If one decides to go ahead with a purchase before this happens, it is highly advisable to involve a legal expert in the transaction.
What trends suggest
While tier 2 and tier 3 towns are increasingly becoming attractive realty destinations, the trends vary with the specific economic drivers. While J&K may have huge potential as a real estate destination, economic activities are yet to shape up properly.
Puri further explains that the smaller cities which have qualified under the Smart Cities programme are seeing very good traction and have in fact taken a lead over tier 1 cities in this programme. This is for many reasons — they have more to gain, face fewer challenges in terms of resistance to change, have less densified urbanization patterns to work with, and enjoy the advantages of easier land acquisition and — in some cases — stronger local political will.
Is it the right time to take the plunge?
Certainly not, since there is a lot of ambiguity around the rules and there are no clearly defined RERA policies also. Experts suggest that investors should not take hasty decisions as the region’s viability as a real estate investment destination is still under doubt and lacunae still exist.
Gulam Zia, Executive Director – Valuation & Advisory, Retail & Hospitality at Knight Frank, said that the region of Jammu and Kashmir can provide great potential for development in the future. However, given the fact that the market is nascent, the valuations are still not known. Any new market such as this one poses the fundamental problem of benchmarking, which makes it difficult for investors to make sense of the correct valuation of properties.
Corroborating this
view, ANAROCK’s Puri says said that it is still too early to gauge the real
impact of this move on Kashmir’s real estate market — or indeed its viability
as a property investment destination. As of now, it is still a highly sensitive
region and security concerns will keep residential property buyers at bay since
safety and security are an integral aspect of any homebuying decision. Once the
situation stabilizes, it will still need the benefits of RERA-level regulation.
Puri, however, believes that the move to revoke
Article 370 and Article 35A will have a positive impact on the overall real
estate market in the region. He also said that the locals should finally see an
increase in the value of their properties, based on the prospects of this
market opening up for Indians from outside J&K to finally invest in
immovable property in the region.
The way forward
Zia said that it would be advisable for investors to look at alternate ways of entering the market such as joint development and joint ventures with local partners. Under such an understanding, the land component would be retained by local partners, while national-level players would bring in the technical know-how in the fields of development management, financial strength and marketing strategies, amongst other things.
Watchouts
Fake news and advertisements by miscreants on social media, offering villas and bungalows, have been doing rounds off lately. While there is huge consumer interest to own a property in the newly formed UTs, investors must not fall for such unsolicited advice or offers.
Source: Economic Times
