With auctions flopping, realty prices take a hit
The real estate bubble in Ludhiana seems to be on the brink of bursting. Auction of commercial sites held by different urban development authorities in the recent past have been deferred, mainly due to lack of buyers. While there is little hope of revival of the real estate sector in Ludhiana, the lack of interest in government property is now rubbing off on the fate of private realty projects as well.punjab Updated: Dec 10, 2014 13:23 IST
The real estate bubble in Ludhiana seems to be on the brink of bursting. Auction of commercial sites held by different urban development authorities in the recent past have been deferred, mainly due to lack of buyers.
While there is little hope of revival of the real estate sector in Ludhiana, the lack of interest in government property is now rubbing off on the fate of private realty projects as well.
At least 12 auctions were deferred or cancelled due to different reasons this year. Lack of buyers was the main reason why these auctions were delayed. Ludhiana Improvement Trust (LIT) and Greater Ludhiana Area Development Authority (GLADA) held at least 30 auctions this year of different properties.
Failure of the auctions of commercial properties has indicated that there were little chances of revival of the real estate sector in Ludhiana anytime soon. Most of the auctions included plots, booths, shop-cum-flats (SCFs) and other commercial sites.
However, poor response to these auctions notwithstanding, GLADA is undeterred. Its recently held auction bore fruit in which the authority was able to fetch Rs 29 crore by selling properties in Dugri. The urban authority earned double the price of reserve price fixed for seven SCOs and six booths.
Ludhiana has seen a change of skyline during the past years with some reputed townships entering the city in different areas. Many townships have come up on Ferozepur road, Chandigarh road, Pakhowal road and other areas of Ludhiana.
But despite this inflow of investment in the real estate sector, realtors believe that it will still take time for the sector to gear up. Even the status of Ludhiana as the industrial city of the state has not been able to lift the sentiments of buyers who were so far shying away from investing.
One of the biggest auctions of 8.8 acre of land of Punjab Urban development Authority (PUDA) situated opposite mini secretariat on Ferozepur road failed twice this year as no bidder turned up. The auction of the property was first held on February 17 and then on June 24. Reserve price of the property has been kept at Rs 415 crore. Commercial buildings or housing site could be developed at the site.
Colonisers and realtors accuse the state government of making such policies that have caused a logjam in the property business.
Kultar Singh Jogi, president of the Punjab coloniser and property builder association, said the state government should ease the policies so that people could easily buy private properties that would bring inflow of money in real estate thus giving a thrust to commercial properties.
Jogi added that a property board should be established by the state government in which officials and realtors should be included to revive the real estate business.
“The government should decrease the hassles even for regularisation of colonies that has also hampered the growth of real estate,” said Jogi.
Meanwhile, the LIT would hold an auction on December 13 in which SCFs, booths, health centre and school sites in different areas of the city would go under the hammer.
It was the auction of commercial sites that failed to attract buyers, but the response for the residential areas has been satisfactory. A total of Rs 70 crore was earned by GLADA this year through different auctions. Rakesh Kumar Popli, estate officer, GLADA.
When an auction for a site is deferred more than two times, a proposal is sent to the state government that allows lowering of reserve price of the properties for next auction. Jeevan Bansal, estate officer, Ludhiana Improvement Trust.
Areas where auction of properties was deferred
Model Town Booths
Model Town Extension Booths
BRS Nagar SCF
Kidwai Nagar School site
SBS Nagar Booth
Rajguru Nagar SCF
First Published: Dec 10, 2014 13:11 IST