The auction of 200 industrial plots in the upcoming IT city of Mohali will be the first test of demonetisation impact on the real estate market in the Tricity. Although the scheme that closed on October 28 got a good response with 6,700 applications, Wednesday’s draw of lots shall be an indicator of demonetisation’s impact on the realty sector. Real estate experts are apprehensive about the response since the successful allottees shall have to shell out 35 per cent of the total cost of the plot within 30 days. The IT city is located near the International Airport in Mohali.
The price for each plot is Rs 14,000 per square yard. Out of 200 plots, there are 145 plots of 500 square yards and remaining 55 plots of 1,000 square yards each. The price for a 500 and 1,000 square yard plot comes out to be Rs 70 lakh and Rs 1.4 crore, respectively. The successful allottees will have to deposit 10 per cent of the total amount within 48 hours of the draw, 25 per cent within 30 days and remaining 65 per cent within three years. The only silver lining that the real estate experts are seeing is that it is a “draw of lots” and not an “auction”. After GMADA failed to auction its properties with its last two auctions failing to attract much response, the authority had come out with the “draw of lots” scheme.
The draw of lots shall be held at GMADA office in Phase VIII of Mohali at 10 am. Speaking to Chandigarh Newsline, GMADA Chief Administrator Varun Roozam said that they were hopeful of good result as the number of applications was more than they expected. He added that the draw would be conducted transparently and demonetisation won’t have any effect on it.
Shailander Anand, former president of Mohali Property Consultants Association, said, “The only saving grace is draw of lots. It is the first time that GMADA has come out with such a scheme for industrial plots. Previously, there used to be auction. Since there is already a slump in real estate market, demonetisation may add to it. Frankly, we are not hoping much from the scheme. It shall be interesting to see what comes out of it tomorrow.”
J P Singh, a Mohali-based real-estate consultant, said, “From the number of applications, the response appears overwhelming. The scheme was closed before demonetisation and the draw will be held after it. The price of plots is high. Generally, the successful applicants sell off plots and earn profits. It is considered to be a kind of a lottery. But with the demonetisation effect, there may not be many buyers for such plots and in case the actual allottee is not able to pay the entire amount, the scheme may not get the desired response.” The scheme was opened for public on October 4 and closed on October 28.
Track record of poor auctions
The auction of 31 commercial and residential sites by GMADA last month had turned out to be a major flop. Only nine (two residential and seven commercial) out of 31 sites were sold out. Another auction in February too turned out to be a damp squib as GMADA could barely auction three out of 21 sites even after slashing the reserve price by 20 per cent.
For all the latest India News, download Indian Express App nowFirst Published on: November 30, 2016 5:54 am