Greater Mohali Area Development Authority (GMADA) could sell only six of the 20 plots that went under hammer here on Friday. The response to the auction was lukewarm even though the authority had slashed the reserve price by about 20%. GMADA earned `16.5 crore from the auction.
Real estate experts blame the unrealistic reserve price and the recession in the property market for lack of enthusiasm among buyers. Also, experts say the response would have been better if the auction had not taken place during the festival season, especially after the reserve price was slashed by 20%.
However, GMADA officials are optimistic saying “the real estate market is showing positive signs” as there was no dearth of bidders for plots in Sector 68.
In all, six plots, including four plots measuring 507.5 sq yds each and one plot of 118.75 sq yds, were sold. The highest bid of `4 crore came from one Rakesh Kumar for a corner plot in Sector 68 against a reserve price of `3.04 crore.
“The reason behind poor response to GMADA auctions is unrealistic reserve price. There is need for GMADA to drastically slash the price to win over the buyers,” said Harpreet Singh Dadwal, a property consultant.
Amandeep Gulati, another property consultant, said, “The cash flow is slow and the market does not have genuine buyers or financers at the rate which GMADA wants to sell its properties for. The authority is holding auctions at very short intervals even when the market is sluggish.”
“The availability of the houses in the open market is more than demand and prices are far less than those of GMADA’s,” said Mahavir Singh Dhillon.
“During the auction, properties in Sector 68 were preferred ones. There is a positive sentiment in the market and appreciation in value has also been witnessed. The rate this time was on par with the market,” said Sukhjeet Pal Singh, additional chief administrator, GMADA.