 "Magicbricks to auction properties unsold for months")
Properties, which have remained unsold despite being on the block for several months, will now be auctioned online on real estate portal Magicbricks.
To start with, the portal has started auction process for over 200 properties across Delhi-NCR and Mumbai. These include properties which have been listed on the portal for more than six months for sale as well as new ones.
"Once, we successfully conduct auction in these two locations, we will take this model across all major cities by the end of March. Earlier, we were providing auction platform to the banks for properties which have defaulted on loans. Now, we have extended the same model for the end consumers," Sudhir Pai, CEO, Magicbricks told Business Standard. Magicbricks is owned by Benett Coleman and Co Ltd.
"The aim is to discover the right market price for the property - in which both buyers and sellers are satisfied," he said.
The properties are put on auction after consultation with owners/sellers. While, buyers will have to deposit Rs 10,000, sellers will have to submit Rs 25,000 for participating in the auction. Both these deposits are refundable, if there is no breach in the agreement.
"We are trying to create a competitive marketplace to discover efficient price in line with the market trends. The two ends of spectrum - buyer and the seller - will be brought together on this platform and resolve the logjam over pricing," Pai added.
The real estate sector - especially residential segment - has been witnessing a slowdown for the last couple of years. Though the number of enquiries have increased significantly, there is hardly any action on the ground except in select locations/cities. Developers have been facing fund crunch and rising inventory and focusing only on clearing existing stock.
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According to a report by Liases Foras, between Q3 (October-December) 2014-15 and Q3 (October-December) 2015-16, unsold stock across all major cities increased by 21%, from 932.1mn sqft to1124.9 mn sqft.
All the eight cities witnessed a rise in the unsold stock with Ahmedabad 33% and Pune 36% having shown a maximum increase, followed by MMR at 28% Though the increase in unsold properties in NCR is only 14%, it tops the chart with an unsold stock of 360 million sq ft, followed by MMR Region with 235.9 million sq ft.
Overall the transactions in residential space have declined by 30-70% depending upon the location, according to experts and the auction model if proved successful could be the next big thing in residential space to bring back the sales momentum.