Realty portal Magicbricks to begin online auction of unsold properties

It has begun this process for a little over 200 properties in the region in and around New Delhi and in Mumbai

Properties, which have remained unsold despite being on the block for several months, will now be auctioned online on real estate portal MagicBricks.

To start with, the portal has started the auction process for over 200 properties across Delhi-NCR (National Capital Region) and Mumbai. These include properties which have been listed on the portal for more than six months for sale, as well as new ones.

“Once we successfully conduct auction in these two locations, we will take this model across all major cities by the end of March. Earlier, we were providing the auction platform to banks for properties that had defaulted on loans. Now, we have extended the model to end-consumers,” Sudhir Pai, chief executive, MagicBricks told Business Standard. MagicBricks is owned by Bennett Coleman & Co Ltd.

“The aim is to discover the right market price for the property — in which both buyers and sellers are satisfied,” he said. The properties are put on auction after consultation with owners/sellers. While buyers will have to deposit Rs 10,000, sellers will have to give Rs 25,000 for participating in the auction. Both these deposits are refundable, if there is no breach of the agreement.

“We are trying to create a competitive marketplace to discover efficient price in line with market trends. The two ends of spectrum — buyer and seller — will be brought together on this platform to resolve the logjam over pricing,” Pai added.

The real estate sector — especially residential segment — has been witnessing a slowdown for the last few years. Though the number of enquiries have increased significantly, there is hardly any action on the ground except in select locations/cities. Developers have been facing fund crunch and rising inventory and are focusing only on clearing existing stock.

According to a report by Liases Foras, between Q3 (October-December) 2014-15 and Q3 (October-December) 2015-16, unsold stock across all major cities increased 21 per cent from 932.1mn sqft to1124.9 mn sqft.

All the eight cities witnessed a rise in the unsold stock with Ahmedabad 33 per cent and Pune 36 per cent having shown a maximum increase, followed by MMR at 28 per cent Though the increase in unsold properties in NCR is only 14 per cent, it tops the chart with an unsold stock of 360 million sq ft, followed by MMR Region with 235.9 million sq ft.

Overall the transactions in residential space have declined by 30-70 per cent depending upon the location, according to experts and the auction model if proved successful could be the next big thing in residential space to bring back the sales momentum.