New Delhi: The Delhi Development Authority’s sale of 5,010 apartments, a rare offer in the Capital, saw Delhiites lining up by the thousands to apply for a chance to own one.
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By the end of Tuesday, when the authority had stopped receiving applications, an estimated 864,000 applications—equivalent to nearly one in every 16 of the city’s residents—had been bought and some 400,000 downloaded from the Internet.
DDA spokeswoman Neemo Dhar said the number of applications received at the authority, each with a deposit of Rs1.5 lakh, wasn’t immediately available.
One real estate expert, Abhilash Lal, a director at consultant DTZ Holdings Plc., predicted that 80% of these forms would have been turned in along with a Rs1.5 lakh deposit each. The draw of lots for the apartments is likely to be held within three months, said Dhar. DDA, however, will not pay interest on the deposits to those who do not win allotments.
Queuing up: Applicants for DDA’s housing scheme at Vikas Sadan in New Delhi. By the end of Tuesday,an estimated 864,000 applications had been bought and some 400,000 downloaded from the Internet. Harikrishna Katragadda / Mint
Experts were divided in their analysis of the surging demand with opinions ranging from it being symptomatic of the city’s chronic shortage of relatively affordable housing, to greedy citizens jumping in on a scheme that doesn’t place any re-sale restrictions on those who win the lottery, a departure from past DDA sales.
According to DDA, which says its mandate is to provide affordable housing and not necessarily profit from it, the apartments are priced at about 40% below market rates. These units are typically sought after because they are fully finished flats and relatively cheaper than those offered by private builders.
There will be a “fair amount” of speculators, predicts DTZ’s Lal. “Their (DDA) prices are extremely competitive, so people see it as a good opportunity to apply but not everyone who applies does it with the intention of staying in the flats.”
The apartments in this year’s sale range from one-bedroom homes for low-income households to three bedroom houses, priced between Rs7 lakh and Rs78 lakh in areas such as Vasant Kunj, Rohini, Dilshad Garden, Paschim Vihar, Motia Khan, Dwarka and Pitampura.
The last time DDA announced a similarly large scheme in 2006, it received some 200,000 applications for 3,000 houses. Since its inception in the 1960s, the authority has until last year offered 42 housing registration schemes, allotting some 360,000 houses, of which it estimates nearly half as being for lower income groups. Still, with property in the city getting scarce, those wanting to buy apartments or houses are forced to move elsewhere in satellite towns that surround the Capital.
Local government-run developers often have a lock-in period in the sale agreement to prevent buyers from selling the property within two-three years. This is usually done to make sure that the properties are bought only by genuine and not speculative buyers.
But this time over, the DDA flats on offer “are freehold properties, which means the owner will own both the flat and the land on which it is built. So, we do not have a lock-in period for the resale of the properties,” Dhar, the authority’s spokeswoman, said.
Anadi Sah, an executive with a media buying firm and an applicant, said he chose to apply for apartments on the outskirts of the city, hoping to increase his chances of winning.
“Very few apply for such areas and so there are more chances of me getting a flat,” claimed Shah who stays with his parents. He figures an apartment in Delhi will always be in demand since housing supply in the city is low with new construction mostly in adjoining Gurgaon and Noida.
Others, such as city-based lawyer Ann Mathew, who has applied with help from State Bank of India, the country’s largest lender, said she would live in the flat if she wins one. “The areas that I have given as preference are Vasant Kunj and Pitampura because those are areas I would like to be in,” she said.