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Players pull out of Gurgaon,pundits say inflated market on correction course

Alarm bells are ringing loud and clear in Gurgaon as commercial and residential developers have started pulling out of projects.

Written by Tanushree Roy Chowdhury | Gurgaon |
February 6, 2009 11:49:43 pm

Alarm bells are ringing loud and clear in Gurgaon as commercial and residential developers have started pulling out of projects.

Senior officials in Gurgaon’s District and Town Planning (DTP) office have confirmed that BPTP and DLF have closed the files on several projects – most of them in new sectors.

The Country and Town Planning Department in Chandigarh says out of 72 applications for cancellation in the state,52 are from Gurgaon.

An official said: “Developers want licences cancelled. Even applications for licence verification are on the wane.” There were 42 requests for verification sent to the district town planner,Gurgaon,in November 2007 and another 28 the following month. Last November,the DTP office in Gurgaon received just four applications,which dropped to one in December.

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Director,Town and Country Planning,S S Dhillon said: “We’ve got applications for cancellations from even those who have not received their licences. They have asked us for refunds.”

Madhusmita Moitra,the District and Town Planner,Gurgaon said,“Usually,developers apply to the DTCP,Chandigarh office,for the licence. They have to pay a fee for it. Once the licence is issued,the next step is to pay the external development charges. Only in rare cases does a developer submit his licence application to district offices. Our job at the district level is to verify the details submitted by the developer. We then send the report to the headquarters (Chandigarh). There has been a drop after the market slumped.”

The DTP office in Gurgaon received nearly 50 applications for verification from the DTCP in January,23 in February and 23 in March,2008. By August they had received 19 applications. This dwindled down to five by September. No verification has been sought by the head office in January this year.

Anshuman Magazine,the chairman and managing director of real estate consultants C B Richards Ellis,South Asia,said,“The volume of transactions has dropped. Last year,a developer would have sold out approximately 30 per cent of his units by the launch. The prices today point at what the market can absorb.” He added the price drop is notional. He said: “Prices are only coming down from their abnormal peaks.”

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