Dehradun, the capital of Uttarakhand ranks very high on the list of places where Non Resident Indians (NRIs) make their real estate investment. A survey by the industry body Assocham revealed that Bangalore topped the list for property investments by NRIs; Chennai came in a close second followed by Mumbai, Ahmedabad and Dehradun.
It is estimated that nearly five million NRIs live in the Gulf Co-operation Council (GCC) – United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain and their remittances amount to USD 30 billion and more. Most of the investment goes into property mainly because of the favourable exchange rate.
The interest in Dehradun is not just from NRIs but also from many people who work high pressure jobs in the cities and are looking for a second home in the hills. So, in recent times, this state has witnessed an increase in demand for property in Uttarakhand. This demand has fuelled development of property in Uttarakhand, targeting not just the NRIs but also the people from the metro cities. One resident said that the demand from the NRIs has propelled a spurt in builders developing apartments in Uttarakhand.
Though buying a second home in the hills is a dream for a lot of people, this decision needs to be given a lot of thought. The first point to be factored in is; how many days in a year would the home be occupied. Would the number of days warrant the cost of maintenance and the local taxes is a question that must be asked? Another important factor is whether the children would like going to the same place every year. And finally, if the plans are to retire to this place, does it have adequate health care facilities and other support services.
Many of the major players like Unitech are already in this market and have acquired large tracts of land for both commercial and residential development. Many corporates and institutions are entering the state so the developers are anticipating an increase in commercial property too. The price of land, therefore, has also been rising steadily in this state. Though apartments are popular, there is also a demand for farmhouses, bungalows and villas. The popular destinations in the state, besides Dehradun, are Uttarkashi, Rudrapur, Chamoli, Almora, Haridwar, Naintal and Mussoorie.
Take a look at the property prices in Dehradun. During the period April to June this year, the prices in Mussorie By Pass and Sahastradhara Road has gone up 1% and 3% to INR 3650 and INR 3900 per sq ft respectively, while Rajpur Road has dipped by 8% to INR 3900.
Uttarakhand, earlier known as Uttaranchal, is also called the Land of the Gods because of the large number of temples and places of pilgrimage in the state. The state is well known for its lovely locales and reflects the stark mountainous beauty of the Himalayas, the Terai and the Bhabhar. The state was created from the northwestern districts of Uttar Pradesh. The Tibet Autonomous Region of China lies to the north; on the east is the Mahakali Zone of the Far Western Region, Nepal while Uttar Pradesh borders the southern part and Himachal Pradesh to the northwest. Kumaon and Garhwal are the two divisions of Uttarakhand. Dehradun is the capital, the largest city of the region as well as the railhead.
There are no restrictions for people from outside the state buying apartments in Uttarakhand. Those wanting to construct can buy land up to 2700 sq ft, but for large projects of group housing more land can be acquired. Local authorities are giving permission on a case by case basis for individuals to buy larger plots.
However there has been confusion on the rules governing the purchase of agricultural property in Uttarakhand. The reason for the confusion was the earlier law which prohibited outsiders from owning more than 250 sq m of agricultural land but in September 2011, the Uttarakhand High Court struck down the contentious land reforms law in the state. The new judgment said that all citizens of India could purchase land up to 12.5 acres of agricultural land under the Land Ceiling Act. The earlier law was also discriminatory toward the residents of Uttarakhand.
One of the big problems about buying property in Uttarakhand is that the state is prone to land slips and natural disasters. The state machinery is often inadequate to deal with these disasters.
Image: By Paul Hamilton (Flickr: Dehradun Valley from Landour) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
Nina Varghese for IndiaProperty.com