Builders bet on 7 lakh DDA rejectees

Private builders have unleashed an ad blitz coinciding with the list of winners published by Delhi Development Authority in mainline newspapers.

Are the seven lakh people who lost out in the draw of lots for Delhi Development Authority's flats prospective buyers for private builders in Delhi NCR?

The Developers believe so and have lost no time in chasing the unlucky applicants of the city's biggest property draw. Within hours of the DDA announcing its 16,118 winners, private players came out with special discount offers or at least the promise of a “dream home” at affordable rates.

Planned move

Evidently it was a planned move. For the ad blitzkrieg by companies like RG Group and Paras Buildtech coincided with DDA's announcement in mainline newspapers.

“Do not get disheartened for missing the DDA allotment,” said a full page advertisement by RG Group for Budget Homes in its Noida and Greater Noida projects. To sweeten the deal it is offering a discount of one per cent on the basic cost. A flat at its Noida project will be available at Rs 2,772 a sq. ft against the original Rs 2800 .

Paras Buildtech's kept its pitch simple. “Getting a home in the draw might not have been in your luck. Thankfully getting a dream home is,” it says.

Messages on mobiles

Others like Logix took a bolder approach. Messages to mobile subscribers said that missing out on the DDA draw could turn out to be a ‘blessing in disguise', as the company is coming up with Logix Golf theme township at Noida! Mr Bhim Yadav, Chief Executive Officer of Falcon Realty Services, is hopeful that those who did not succeed in the DDA draw will check out other options. “Rates will remain competitive as developers will try to attract these buyers.”

But not everyone buys into that argument. DDA customers are not necessarily customers for private builders, they say. “DDA flats are attractive due to the possibility of capital appreciation, easy housing finance and ready- to- occupy condition. These may not be true of private project,” feels Mr Samir Jasuja, Founder and CEO of PropEquity, a real estate consultancy firm.

DDA's flats are priced 30-50 per cent cheaper than the market rate. For instance, a three bedroom flat in Vasant Kunj with a price tag of Rs 1.1 crore could easily hold an upside of Rs 50-75 lakh for owners. Nationalised banks are willing to even finance the application amount for a DDA scheme. But take two-three months approve loans for private projects.

And will those applying for DDA flats in premium locations such as Vasant Kunj, Jasola and Mukherjee Nagar, settle for locations where private projects are coming up.A DDA applicant Mr Sharad Prasad, who did not win DDA's draw says he would now look to buy a DDA flat from the secondary market.

Mr Jasuja also cautions builders not to get carried away by the absolute number of applicants in the DDA scheme. “There could be cases of more than one person from a family applying to improve chances at the DDA lottery.” he says. His estimate: Only about five per cent of the 7.5 lakh applicants may be potential buyers for private builders!

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