News & Views on Indian Real Estate

Thursday, September 04, 2008

Investors Betting Big On DDA Flats For Resale

Private realty developers might have to face tough times ahead, as investors are betting on chances for higher returns from cheaper DDA flats. On an average, a DDA flat is available at half the price of apartments being developed by private developers. For instance, the resale value of a 990 sq ft DDA apartment in Pitampura is pegged at between Rs 60 lakh and Rs 65 lakh. These apartments are coming into the market at a time when private developers are finding it tough to sell the apartments due to buyers baulking at the interest cost on home loans, which range above 13 percent. The situation will get tougher for private developers if the expected supply of nearly 1,200 cooperative group housing society apartments in various pockets of Delhi, primarily the western locality of Dwarka, comes into the market. Another plus point, which is attracting buyers towards DDA flats is that they are ready for delivery. The authority is charging a registration amount of around Rs 1, 50, 000 from applicants, promising possession in around three months. The delivery period of private properties is comparatively higher at an average of 36 months from the launch.