Govt Action Lowers Prices Of Dda Flats

The proposed government crackdown on the illegal construction in Delhi Development Authority (DDA) flats has prompted buyers to pursue a `wait and watch' approach consequently bringing down transactions of such flats to a virtual standstill.

"Not only has the sale of Delhi Development Authority flats plummeted but the rental business has also suffered adversely,"a leading property dealer of east Delhi said specifying that rental value of Dilshad Garden has gone down by 20-25 per cent whereas Mayur Vihar phase-I has a decline of 5-10 per cent.

"As far as purchase of a flat in these areas is concerned most of our clients who had made up their mind to buy a flat in these localities have postponed the idea. Now they press for a clean title with no construction," he added.

 

Delhi Development Authority flats with proper title and legal construction are still in demand. However, prices of these have not gone up considerably as the volume of real transactions is very low.

Buyers prefer to wait and watch, after the Vasant Kunj demolition drive undertaken by authorities recently. Some of them are in the hope that property prices will go down further, a South Delhi-based property dealer said.

Unmindful of the impact on property prices in the capital, the government is determined to launch a massive crack-down in residential colonies.

"A high level official team has recently visited some of the DDA colonies where blatant violation of building by-laws has reportedly taken place.

The government has prepared a comprehensive list of such properties and is planning to launch a massive clean-up operation soon," a senior official of Union urban development ministry told Business Standard.

The government action against the illegal constructions in posh areas of South Delhi has also affected the property prices.

The price of the illegally constructed third floor apartments in Lajpat Nagar has gone down by 25 per cent.

The current drive has also affected the basements in these areas. According to a Delhi Development Authority official, a basement in the residential area cannot be used for commercial purposes. However, most of these basements are thriving on commercial activities.

Government has served notices to such basement owners. This on-going drive has not only resulted in a fall of 25 per cent in the prices but also reports of panic selling have come in.

"But purchases are taking place where the buyer is politically well connected," a property dealer of the locality said.