The demand-supply dynamics in Shimla's real estate market are pushing prices up, says Munieshwer A Sagar

Shimla, the queen of the hills, is the most sought-after realty destination among hill stations in Himachal Pradesh.

Shimla, the capital of Himachal Pradesh, is located 120 km from Chandigarh and 370 km from Delhi. Developed as a summer capital during the British Raj, the hill station, at an average altitude of 2,205 m, has attracted many tourists and realty investors during its 150-plus years’ existence.

The revival of the local property market, which started about six months back, is steadily gaining momentum under restricted supply and burgeoning demand.
The realty scene In Shimla and its adjoining areas, realty buyers can explore residential properties like apartments, built-up houses, plots and luxury cottages.

The real estate market was in stagnation and price correction mode between 2007 and 2009. “The realty scene in the city started to change by the beginning of 2010.
Prices have appreciated in the last six months, driven mainly by local demand and lack of adequate supply in the city and its surrounding areas,“ says Manohar Lal, a Shimla-based realty expert.

According to experts, local demand for housing within the municipal limits is driving property prices up, while cottages in the city’s periphery are seeing renewed demand from outside the state. Mukesh Mishra, a real estate expert and consultant based in New Shimla, says, “Local people prefer to live within the city, hence the demand for residential space in areas like New Shimla is increasing. Supply has not kept up with this increase in demand. All categories of residential properties are in demand, including plots and flats. In New Shimla, for instance, prices are hovering at around R40,000-R50,000 per sq m. In Old Shimla, which is very congested, current prices are around R20,000R25,000 per sq m.“

Meanwhile, in peripheral areas such as Mashobra and Naldhera, cottages, particularly those in the luxury segment, are attracting buyers. People from outside the state prefer such properties, which are usually in picturesque and serene locations. “Prices in these areas are around R7,000-R9,000 per sq m.
Built-up cottages occupying an area of about 150-200 sq m are priced between R60 lakh to R1 crore. The price depends on the location of the cottage, open area provided with it, access roads, and facilities, such as furnishings etc,“ says Amarjit Raina, a Shimla-based real estate consultant.
Retarding growth The increasing congestion in the city is one of the major impediments for realty growth in the city. Local realty experts say that supply constraints are pushing prices up.

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