Natural disasters hit Himachal, Uttarakhand real estate and tourism boom

The series of natural disasters that have wreaked havoc in the two Himalayan states of Himachal Pradesh (HP) and Uttarakhand have not only caused severe damage to livelihoods and properties, but have also hit the nascent real estate boom in these states, which went into top gear after the outbreak of the Covid-19 pandemic.

Over 100 deaths due to natural calamities have been reported since the monsoon. This is now emerging as a major threat to the states’ residential and commercial projects that were in high demand since the outbreak of the Covid-19 pandemic.

Take real estate major DLF, for instance. The Delhi-based realty giant that comes up with luxury residential and commercial projects primarily in Gurugram, Haryana, launched its luxury hillside project in the heart of Shivalik Himalayas in 2012. Spread across 58 acres and located in Kasauli, HP, DLF Samavana has luxury resort homes, including villas, plots and flats. With a starting price of Rs 1.05 crore—that went up to Rs 6.5 crore—it was one of the most expensive projects in HP. But that did not deter buyers, and it was sold out at the peak of the pandemic in 2020.

And there are others. With buying and converting land for residential and commercial use a major challenge for non-residents of the two hilly states, plotted developments, apartments and luxury villas from realtors have mushroomed in and around popular destinations like Shimla, Solan and Kasauli in recent years. From Chandigarh-based Sushma Builders that has key projects in Kasauli to Cliffton Valley that launched 2 and 3BHK apartments near Shimla, many realtors jumped the bandwagon looking to ride on the surge in demand for holiday homebuyers from neighbouring states.

“Demand for residential units, in the form of villas and apartments, grew exponentially in the past 3-5 years in Himachal Pradesh. Residents of Delhi-NCR and Chandigarh, even affluent buyers from towns like Lucknow, Ludhiana or Jaipur, especially who are exposed to beauty of the Himalayas in the state, were flocking to buy their second homes in these locations. However, after the massive disaster that unfolded this year demand is getting hampered. Many, who had shown interested in such properties are no more inclined to move forward with their purchases,” says a real estate developer operating in HP on the condition of anonymity.

Manish Goyal, Founder of Stotrak Hospitality that runs multiple hotels, holiday homes and is developing a residential property in HP, told Business Today that extreme pressure to ramp up supplies have caused much damage to the fragile ecosystem of the hills that is now causing havoc. “This year July onwards the situation is really bad for businesses in the region. For the past month, businesses in HP have suffered majorly. While earlier it was the western and central HP, regions like Manali and Mandi that bore the brunt of damage, now even Mussoorie (Uttarakhand) is witnessing natural calamities,” he says. 

As a result, tourism in HP has suffered a major hit. While under normal circumstances an extended holiday like the Independence Day weekend would have meant 100 per cent occupancy of rooms booked a fortnight ahead, this time most tourists cancelled bookings in the wake of flash floods and incessant rains. Goel, however, is among the lucky few whose residential property was undamaged as it is located in the Nahan region in Sirmaur district of HP.

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