Finally, after four years, the UT administration is set to auction 111 commercial and residential sites in the city this December.
The development assumes significance as property prices - both commercial and residential - had shot up when the last time such an auction took place in December 2009.
For this year's auction, Chandigarh estate office has written to the finance department for formulating modalities for the auction, a well-placed source in the estate office said. Residential properties to be up for action are in Sectors 40, 37 and 35, while commercial sites are in Sectors 37, 39 and 43. "A team has been formed for inspecting the sites," the source said. UT finance secretary VK Singh and estate office officials will also take part in the inspections.
In 2010, the administration had planned an auction of residential and commercial sites, but it was cancelled at the last minute.
Dilemma over fixing reserve price
With no auction taking place in the past four years, Chandigarh administration is in a dilemma over fixing the reserve price for the properties to be put on auction.
UT assistant estate officer (AEO) Rahul Gupta said that fixing the reserve price would not be easy as no auction took place in recent past. By practice, the estate office fixes the reserve price by taking out an average of the last three bids received for a property of the same size.
Owing to high reserve prices and other factors, many auctions of commercial properties have received a lukewarm response in the past.
For keeping a realistic reserve price, the administration has also decided to conduct an exercise to study the rates prevailing in surrounding areas. The former president of Association of Property Consultants of Chandigarh, Kamaljit Singh Panchhi, said that the administration had recently hiked collector rates. “The reserve price has to be reasonable, otherwise the auction will not attract buyers,” Panchhi said.
He added that the administration should also amend its rule pertaining to balance payment. According to Chandigarh Estate Rules of 2007, buyers have to make a complete payment within 90 days of the acceptance of the bid. “It’s difficult to make huge payments in such a short time,” Panchhi said.