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Thinking of buying property in Jammu and Kashmir? Here are 6 things to know

Breathtaking views apart, do consider the security situation, old laws, connectivity and appetite for real estate before taking the plunge.

Security remains a concern in J&K.

Security remains a concern in J&K.

The Centre has put Jammu and Kashmir on the real estate map of India by allowing any Indian citizen to buy land in the union territory where non-residents could not buy immovable property until a year ago.

On October 27, the government notified the Union Territory of Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Third Order, 2020, omitting the phrase “permanent resident of the state” from Section 17 of the Jammu and Kashmir Development Act. This section deals with the disposal of land.

The move comes more than a year after the Centre abrogated Article 370 that gave special status to Jammu and Kashmir and bifurcated the border state into union territories of Jammu and Kashmir and Ladakh. 

The changes in land law, which are only for Jammu and Kashmir, are significant as an Indian citizen can now buy urban, or non-agricultural land and property in the UT. 

 The laws also talk about facilitating the sale of farmlands but for that government’s permission will be required like in several other states. The laws, however, do not impose limits on the land that can be used for housing or commercial activity. These curbs are there in states such as Himachal Pradesh and Uttarakhand, where “outsiders” can’t buy agricultural land.


Also read: Rules to buy land in Jammu and Kashmir relaxed: Should you invest, what is the fine print and other key questions answered

 What does it mean for the realty sector? 

The real estate sector has welcomed the move, saying developers may launch projects in the union territory, with the picturesque Kashmir Valley emerging as a favoured second-home destination.

“This is a historic move which will further open up investment opportunities in the UT and see a new area of development for the realty sector in the area,” said Jaxay Shah, chairman, Credai.

The decision would allow the a real estate regulation and development authority to come up, which will facilitate sales of plots for commercial and residential purposes in a transparent manner. “The augmented legal framework will bring in transparency and boost investments in the sector,” Shah said.

The Confederation of Real Estate Developers Association of India (CREDAI) is one of the biggest autonomous body of builders and developers in the country.

People who dreamt of owning a house in Kashmir would invest in affordable as well as luxury segments. It would further boost tourism that remains a significant pillar of the economy, Shah said.

But is it as easy as it sounds? Kashmir is battling a decades-old insurgency and Pakistan’s aggressive tactics keep the Line of Control as well as the international border volatile.

Also read: Should you be investing in property in J&K, Ladakh?


Kashmir’s is a place with a view—snow-capped peaks, mighty Chinars, saffron fields and apple orchards to name a few. “I remember the breathtaking and mesmerising view of the milky way and snowfall in full moon nights. I would like to buy property there,” said former army officer Major Ashish Chadha, who now runs Chadha Investment Consultants, a financial advisory firm.

There are, however, many other factors one needs to consider before buying property, be it for use or investment purposes. 

“Just the scenic beauty is not enough reason for someone to migrate from another part of the country to J&K and settle there,” said Sanjeev Govila, CEO, Hum Fauji Initiative, which specialises in planning finances for defence personnel.

Those residents who moved out after the insurgency broke out in the 1980s or for other reasons may think of returning to what is now a Union Territory because of an emotional and cultural connect. But for others, it would not be like migrating between other states, said Govila. 

Not everyone is would want to make a permanent shift. Many would want holiday homes or may buy a property to settle in the state after retirement. 

“One may consider buying a property in Jammu and some parts of Kashmir as holiday or retirement homes. Jammu is well connected with other parts of the country through rail, road and air, and has well-developed health and other infrastructure as well as established economic activities,” said Govila. 

Most parts of Kashmir are connected by road but rail and air connectivity are limited.

Security, and COVID pain

For those considering a second home, security and safety would be a big concern and so would be the legal challenges. Developers, too, will not make a beeline to launch projects in the area immediately.

“They are undergoing pain at their existing locations on account of the pandemic and they will wait for the situation to first stabilise in their existing operations before they start looking at an unchartered territory such as J and K. They would also want to be assured of safety and security,” said Siddhart Goel, Senior Director, Research at Colliers International India.

Worth an investment?

According to Rahul Arora of Trilegal, it is too early to say how the new legal framework will pan out.

Repealing 12 state laws and amending an equal number, the new legal framework is aimed at a major reorganisation in the state, he told Moneycontrol. Such decisions take time to evolve. 

Thus, to facilitate implementation, the framework may be followed up by further orders/notifications or further clarifications, he said.

Given the legal overhaul with the focus on attracting investments but without compromising the UT’s economy, an investor will have to consider the "development zones" which are to be notified by the government for investments and use for specified purposes, Arora said.

Those buying land will have to check if there are any outstanding claims or litigation, he said. 

The new rules bode well for the hospitality, tourism retail, entertainment, healthcare and education sectors.

The Maharashtra government had last year said it was planning to buy two land parcels, in Jammu and Kashmir and Ladakh, for resorts. The Karnataka government, too, proposed a luxury hotel in the Valley.

The real estate market has remained subdued across India for the last few years. Except a few pockets, price appreciation is negligible, and in some pockets, property prices have even slipped.

As the Centre works on a new industrial policy and rolls out development schemes for J&K, some experts think property prices will pick up after the realty market opens up.

“Jammu is expected to see some price appreciation as the government has announced many schemes and plans for this reason,” Govila said.

Therefore, one may think of investing in Jammu and nearby areas, but one should avoid parts of south Kashmir where insurgency continues, he added. South Kashmir is considered the hotbed of insurgency. 

It makes sense to wait and watch. See how it plays out for those who do go there. But if you wish to buy a property right away, it makes sense to stick to the urban areas of Jammu for now. 

Will prices appreciate?

Property is most parts of Jammu and Kashmir is fairly affordable and ranges between Rs 2,200 to Rs 4,000 per sq ft in Srinagar, Rs 2,400-4,000 in Jammu and Rs 2,500- 3,200 per sq ft in Baramulla.

It is too early to gauge the impact of the move on Kashmir's real estate market. As of now, it is still a highly sensitive region and security concerns may keep property buyers at bay.

Price appreciation will happen only if demand goes up and that will be possible if there is the confidence that both people and investments are safe, said Goel of Colliers.

Punjab and Assam, the other two states to battle insurgency, saw prices appreciate once the trouble subsided. Will Kashmir see a similar trend?

“There is a lot of difference between Kashmir and Punjab. For instance, it is difficult to set up industries in Kashmir, whereas Punjab was always rich in agriculture and other sectors. So Kashmir may not see similar appreciation in property prices like Punjab witnessed soon after the end of the insurgency,” said Govila.

Chadha said one could buy property in J&K now but would have to wait for at least 10-15 years to see any significant value growth.

If your risk appetite is high and you can afford to wait for many years for your property prices to increase, then Kashmir could be an option. Jammu is a safer bet but due diligence is a must for both parts.

Should you invest now?

It is too early to predict how demand for real estate will pan out in a highly sensitive region. 

"Even if some are keen to buy property, they will closely watch the political scene unfold before taking the plunge,” said Prashant Thakur, director and head – Research, ANAROCK Property Consultants.

 “Unless safety is given paramount importance, it is difficult for real estate activity to pick momentum here,” he said.

Investors should be extremely cautious before investing in these border areas because these are problematic geographies.

Besides, these parts of the country never had a mature real estate market, constrained by artificial barriers to buying and selling a property. This may take a while to change.

(Ashwini Kumar Sharma is a freelancer.)
Ashwini Kumar Sharma
Vandana Ramnani
first published: Oct 31, 2020 01:48 pm
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