After tepid response to property auctions, CHB cuts reserve prices by 15%
A total of 98 commercial and 17 residential properties will be put up for auction, likely on August 16, with reserve prices slashed by 15%
After multiple flopped auctions, the Chandigarh Housing Board (CHB) has decided to cut the reserve price of some of its commercial and residential properties for the next auction.
A total of 98 commercial and 17 residential properties will be put up for auction, likely on August 16, with reserve prices slashed by 15%.
While the 17 residential properties, all freehold, are located in Manimajra, the commercial properties are on leasehold basis and spread across different locations, including Manimajra and Sectors 38 West, Sector 40-A, 49-B and 61.
The commercial properties include typical booths, service booths, big booths, big booths with expansion joint, bay shops and a restaurant site.
Earlier attempts to auction these properties had elicited tepid response from buyers, primarily due to their high reserve prices, location and leasehold status, which allows occupation for a limited period, mostly 99 years, with government agencies holding the ownership rights.
Consequently, different stakeholders had been demanding a cut in the reserve prices, which was allowed during the CHB board of directors meeting on July 26.
Yashpal Garg, CEO, CHB, said, “The location of the residential units led to poor response from buyers. So, it was decided to make these cheaper to attract more bidders.”
Notably, this is not the first time that CHB has had to lower the reserve prices of its properties in the face of poor response from bidders.
In September last year, the reserve price of some residential and commercial units was decreased by 10% to over 50%.
Earlier, all of CHB’s properties were sold on leasehold basis. But after the UT administration allowed conversion of unsold government properties from leasehold to freehold earlier this year, CHB also started to offer some on freehold.
But it still failed to elicit a positive response for its properties. In its July auction, CHB found no takers for both residential and commercial properties.
In another auction in June, only six of the 31 properties up for auction were sold, with only four residential and two commercial units finding buyers. Even the commercial properties sold could garner only marginally higher bids than the reserve price.
Two properties in Sector 51-A with reserve price of ₹80 lakh each were sold for ₹80.40 lakh and ₹81.77 lakh. It was the same case with residential properties.
In the previous auction, which had concluded in May, the response was similarly poor. CHB could sell only four of the total 35 properties on offer. As many as six commercial and 29 residential properties were up for sale on freehold basis, but only two residential and two commercial properties could be sold.