Effect of the Uttarakhand Disaster on the Real Estate Industry

December 2004 the great tsunami hits the coastal regions of India sub-continent, which was caused due to the shifting of the tectonic plates in the crust of the earth.

June 2013, the great Himalayan tsunami or the flood hits parts of Uttarakhand, mainly the GARHWAL region which includes the district of Rudraprayag and the pilgrimage centres of the region, including Gangotri, Yamunotri, Kedarnath and Badrinath. From 14th to 17th June 2013, these regions received heavy rainfall. Rainfall was 375 percent more than the benchmark rainfall during a normal monsoon. This rainfall caused the melting of the Chorabari Glacier which is at a height of 3800mts and thus caused the eruption of the Mandakini River. This natural calamity is purely associated by the will of nature. Various critics have different perceptions about the floods that took place in Uttarakhand. Religious critics state that this natural calamity took place due to a shift of one of the temples at the Badrinath Dham. Political critics state that the Congress Government did not respect and take care of the bye laws for construction which were very essential, whereas, the Environmental critics say that this natural calamity took place due to over infrastructural development, but the actual cause for this calamity is nothing but God’s own will. Even in the most advanced countries like the United States, natural disasters like the hurricane Sandy in 2012 could not be avoided or for that matter the great Tsunami of Japan could not be escaped by the High Tech nation.

As for the Real Estate industry of the state, there should be little effect on the market movement. Basically the state of Uttarakhand is mainly divided into two major territories the Hills of KUMAON, where the main infrastructural sites of development are Bhimtal, Rudrapur, Saattal, Bhowali, Nainital, Rainkhet and Mukteshwar which are untouched by the calamity. Now, comes the Valley of GARHWAL, where the main infrastructural sites are Dehradun, Rishikesh, Haridwar, Mussourie and Kotdwar which are too untouched by the disaster though floods have taken place in a small region of GARHWAL, but these developing or infrastructural sites of the two regions are located at a distance of 400-500kms from the place where the natural calamity took place.

In fact as we go farther away from the state, the people have skewed perceptions about the magnitude of the disaster. People in the United States assume that the whole of Asia is flooded, people in the United Kingdom assume that the whole of India is Flooded whereas people in the Middle East assume that the whole of North India is flooded. In actuality, only the North Eastern parts of the state have got affected by the calamity. The rest of the regions remain unscratched. Therefore, it would be foolish to consider that the entire state of Uttarakhand is doomed. These calamities can happen anywhere, anytime and without any warnings. The property market in Uttarakhand should not get affected in reality but certainly, the market sentiments are going to be low for a couple of months before a new big event takes place.

Contrary to the market sentiments, for the people who are actually interested in buying a property on the hills, this is the perfect time to take advantage of the situation. The builders and property developers can be pushed against the wall and some very attractive deals can be negotiated with them. It is almost a certainty that the home buyers are going to get huge discounts and other freebies as the developers in the region are fear driven, since most of the tourists and guest visitors went off the hills as soon as the heavy rainfall took place.

To conclude, the mood of the property buyers in the region is sombre, but the effect of the natural disaster on the real estate market of the region is going to be short-lived. Moreover, the regions which house the organised real estate activity in the state are absolutely insulated from the effects of the disaster. For people eager to own a holiday home, this is just the right time to take advantage and bargain some good deals. After all, if not the hills and the valley of lakes where would one buy a second home or a holiday home ?

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