Recession scuppers auctions in Chandigarh City

Realty pangs get real

Chandigarh, September 11
The ongoing recession in the real estate sector has taken its toll on the auction of commercial and residential sites in Chandigarh. With the market going through one of the worst phases in its history, end users and investors have been waiting for nearly two years for an auction to be held.
And, in the process, the UT administration is losing crores of rupees in revenue that it could have earned by way of auction and collection of lease money from commercial properties.
Though the UT administration had planned an auction of residential and commercial properties last year it was cancelled at the eleventh hour.
Given the city’s relatively high standard of living and its emergence as a prime retail destination, the auction of commercial and residential sites always evoked a huge response from end users and investors here. However, officials in the UT administration feared the recession would cost it dearly as the expected response in an auction might well be “below average”. “This coupled with the provision of making full payment in three months’ time could prove to be a damper for an auction to be held at a time when the property market was passing through a crisis”, a senior official said.
The last auction held in the city - in December 2009 - was no different with the average price fetched by a residential property working out to Rs 74,820 per square yard. In fact, a five ‘marla’ (272.25 square feet) plot in Sector 32 was sold for a whopping Rs 1.4 crore at an average price of about Rs 1.06 lakh a square yard.
Despite the fact that commercial property in the city is being sold on leasehold, the average price worked out to be Rs 2.74 lakh per square yard.While conceding the recession was a major reason for the delay in auctioning property, an official said an auction was “overdue” and would be held before the end of this fiscal.

UT LOSING CRORES

Due to delay in auction, the UT administration is losing crores of rupees in revenue that it could have earned by way of auction and collection of lease money from commercial properties.