Bank auctioned properties can save you a lot of money
Realty experts say that foreclosure properties are cheaper by 35% to 40% in comparison to the market rate; over 8,000 such properties have entered the market for sale in the last one year
Though buying a property in the city, be it residential, commercial or an empty plot, falls too heavy on the pocket, sources in the real estate sector claimed that in the last one year several non-performing assets (NPAs) such as flats, plots and office spaces are available in the market via bank auctions. Experts say such properties are cheaper by 35 per cent to 40 per cent when compared to market rate.
Executive editor of a real estate paper Accommodation Times, Dr Sanjay Chaturvedi, claimed that over 8,000 NPAs have come in the market in the past one year. Chaturvedi said, “These are the best options because flats available in the market are heavily priced in comparison to the NPAs. They can be cheaper by 35 per cent to 40 per cent of the existing market rate. Several leading nationalised banks and even private banks have NPAs, and in the coming year the numbers will rise.” Another industry source said that last week itself 100 such NPAs were introduced in the market and would be auctioned by the end of next week.
One such NPA is a flat in French Bridge near Opera House that is available for Rs 23,000 per square feet against the market rate of over Rs 35,000 per square feet. Similarly, office space of 855 square feet in Nariman Point is available for Rs 2.15 crore. When calculated it comes to approximately Rs 25,000 per square feet, which is much lower than the market rate of over Rs 45,000. All these rates are reserve prices.
A public notice issued by one of the auction companies related to a flat on St Francis Road in Bandra has kept a reserve price of approximately Rs 23,000 per square feet. The only thing is the property has been reserved for Roman Catholics. Another flat in Oshiwara is available at Rs 10,000 per square feet (reserve price) against the market rate of almost Rs 18,000 and a shop measuring 740 square feet is priced at Rs 74 lakh.
Prakkash Rohira of Kkarma Realtors said, “Foreclosure properties come at a good rate, but have their own demons. It is worth purchasing them as there are several options to choose from but not before consulting an experienced legal advisor.” Chaturvedi claimed that several rackets are being operated in the city to dupe buyers. He said, “There are many people, who in the name of providing cheaper homes, fleece home buyers. Hence, whoever is interested in buying an NPA flat should either go through bank tenders or inspect the property they plan to bid for.”
What is NPA?
NPA is a classification used by financial institutions that refers to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days, the loan is considered to be a non-performing asset.