In­ter­est not con­vert­ing to sales in pre­mium ar­eas

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Arati Bhar­gava ht­es­tates@hin­dus­tan­ The writer is a se­nior colum­nist.

Though queries from po­ten­tial home­buy­ers, es­pe­cially those look­ing for homes of their own have in­creased, no one is ac­tu­ally buy­ing prop­erty. This is hap­pen­ing even when prices of bun­ga­lows and even smaller hous­ing units in cen­tral and other pre­mium ar­eas Delhi – listed at ` 400 crore and above – have crashed by 30% af­ter de­mon­eti­sa­tion, say realty agents. No one’s ready to pay the kind of rates ex­pected in Delhi’s pre­mium ar­eas in white money.

Land and prop­erty trans­ac­tions here are cus­tom­ar­ily done with cash, de­pend­ing on the prop­erty and area it is sit­u­ated in. The cash cheque ra­tio could be any­where be­tween 80:20 to even 60:40.

Till Novem­ber 8, prop­er­ties in pre­mium area were avail­able and much sought-af­ter for park­ing black money. Af­ter de­mon­eti­sa­tion hoard­ers of cash got busy sort­ing out their fi­nan­cial prob­lems and real es­tate trans­ac­tions were im­pacted as deals could only take place through cheques. “De­mon­eti­sa­tion came like an elec­tric shock to prop­erty trans­ac­tions and vir­tu­ally brought prop­erty sale and pur­chase to a stand­still,” says Deven­der Tara of Tara Es­tates based in Vas­ant Vi­har. This has never hap­pened be­fore and it is likely to take three to four months or more for the real es­tate busi­ness to re­vive.

Dur­ing the last month, where his busi­ness is con­cerned, Tara says there has been “to­tal si­lence” on the prop­erty trans­ac­tion front. The re­ac­tion of those who wanted to sell prop­er­ties has been mixed. Sell­ers he knows have slashed prop­erty prices by 25% to 35%, with some in­di­cat­ing their will­ing­ness to cut prices fur­ther. Even then, many buyers are stay­ing away.

The price tag of ` 600 crore for a 8,000 sq yard plot in Tugh­laq Road has been trimmed by the owner to ` 400 crore. In Vas­ant Vi­har a base­ment and ground floor of a 430 square yard build­ing priced at ` 12 crore is now on of­fer at ` 9 crore.

Prop­erty agent Gau­rav Goel lists out five prop­er­ties in Golf Links – three built on plots of 375 sq yard each and two on 575 sq yard plots each – which are now be­ing of­fered for less. One owner of the 575 sq yard plot is now ready to sell his ` 100 crore prop­erty for ` 75 to ` 80 crore.

Su­dar­shan Sharma of SDR Real Es­tate Agents in Anand Nike­tan says in the 30 years that he has been in busi­ness, it’s for the first time that even non­res­i­dent In­di­ans are show­ing no in­ter­est in prop­er­ties. In ar­eas like Shanti Nike­tan, Anand Nike­tan and West End the num­ber of prop­er­ties avail­able on sale are rel­a­tively few. Al­though the own­ers have trimmed their price de­mand the buyers have yet to come forth, adds.

It’s ap­par­ent that both prop­erty sell­ers and buyers are bid­ing time and wait­ing for things to im­prove. Real es­tate ex­perts also feel that the gover nment’s ex­plicit dec­la­ra­tion that be­nami prop­erty would be on the hit list soon has led many to ex­pect a fur­ther climb­down in prop­erty prices. This they feel is bound to hap­pen as be­nami prop­erty own­ers would like to sell their hold­ings as soon as pos­si­ble at what­ever price they can get to stay out of trou­ble.

The silver lin­ing in the gen­eral seem­ingly dis­mal fall­out is that at last prop­erty prices which had be­come ir­ra­tionally ex­or­bi­tant could ra­tio­nalise.

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