With no realty auction taking place in the past five years, Chandigarh administration is in a quandary over fixing the reserve price for the properties it intends to put under the hammer now.
The administration plans to put over 100 properties — both commercial and residential, in Sector 35, 37, 40 and 43 — on auction, and the estate office has written to the finance department for fixing the reserve price, UT assistant estate officer (AEO) Balbir Singh Dhol told HT.
As per practice, reserve price is fixed by calculating the average of the last three bids received for a property of the same size. However, no auction has taken place since 2009, making things difficult for the finance department. Last year, too, the estate office had written to the finance department for determining the reserve price, but it did not work.
The last auction in Chandigarh was held in December 2009 that saw the average price for residential sites shoot up to Rs 74,820 per square yard while the commercial site price went up to `2.74 lakh per square yard. In 2010, the administration had planned an auction, but it was cancelled at the last moment. As a result of that delay, the administration is losing out on huge revenue.
With a slump in the market, property consultants have been demanding that the reserve price be “reasonable”. The president of the Property Federation of Chandigarh, Kamaljit Singh Panchhi said that due to high reserve price, many commercial auctions held by the estate office evoked lukewarm response in the past.
“With Chandigarh having higher collector rates, there is a need to keep reserve prices on the lower side to attract buyers,” said Panchhi.
Collector rate is the minimum rate at which the property is registered, and nobody is allowed to purchase land and immovable properties in different categories below the rate determined by the administration. Currently, the collector rate in Chandigarh is considerably higher than Panchkula and SAS Nagar.
Thus, for reviving the real estate market, the UT administration is mulling downward revision of collector rates in different parts of the city.