Article from ET Realty
MOHALI: Greater Mohali Area Development Authority (GMADA) has decided to reduce the reserve price of commercial sites, which were unsold in the last auctions, due to poor response. Reserve prices of some commercial sites to be auctioned on December 29 have been slashed by up to 20% to attract bidders.
GMADA plans to auction 32 such sites. There are three commercial sites measuring 5 acres each, of which two are meant for schools and the other for housing societies. The reserve price for auction in Aero City is Rs 83 crore. Reserve price for school sites in Eco City and IT City is Rs 31.87 crore and Rs 35.54 respectively.
There are seven sites for showrooms and 21 for booths across the town. Minimum price for booth is Rs 57 lakh and maximum goes up to Rs 1.49 crore. The seven showrooms which failed to get a bidder in the previous three auctions have been reserved for a maximum reserve price of Rs 4.61 crore and minimum of Rs 2.66 crore.
According to many in the realty sector, the market is facing a slump. A GMADA official said, “We have conducted a survey in town and studied the market and we saw negative trends in the previous auctions conducted this year. Thereafter, a meeting was held and prices of commercial sites were reduced by up to 20%”.
GMADA estate officer Rajdeep Kaur said, “Reserve prices have been slashed by 20% for commercials sites. We are trying to sell pending sites this year and we hope for good response.”
Meanwhile, experts feel deduction in reserve price would not be enough to attract buyers. Property consultants think a 20% rate cut does not amount to much and the administration must formulate a new policy to lure buyers.
JP Singh, a property consultant from Mohali said, “Rate cut by GMADA is a positive approach. But the price is still too high. It will not help GMADA earn much by the end of the year. When the real estate market was on a high, even this much rebate could have lured buyers. But right now, the real estate sector is not doing well and these tactics may not work.”