Tuesday, December 27, 2016

currency ban forces huda to defer sector launches in pataudi & farrukhnagar, Real Estate News, ET RealEstate

GURGAON: Huda is considering postponement of its plan to launch new residential sectors in Pataudi and Farrukhnagar areas of Gurgaon district, fearing losses due to the slump in the real estate market after demonetisation.

Huda is planning to launch new sectors in Pataudi and Farrukhnagar by acquiring 800 acre of land in seven villages. For that, the authority expected to spend around Rs 1,875 crore — around Rs 1,375 crore as compensation to be paid to land owners, another Rs 500 crore to develop the sectors. But after demonetisation, the authority realised it would not be able to recoup enough from selling plots to cover its investment.

Notification for acquisition of the land was issued three years ago. As per the rule, if Huda fails to announce the compensation by December 29, 2016, the acquisition will stand null and void.

Huda was planning to launch the new sectors to help it tide over a deep financial crisis. Officials said they were worried about the possibility of incurring loss from the launch of new sectors, in case they failed to get the desired price for the plots. “The amount required for acquiring the land is quite high. We’ve forwarded the matter to Chandigarh,” said Huda administrator Yashpal Yadav, adding a meeting will soon be called to take a final call on the land acquisition.

Real estate expert Pradeep Mishra said market sentiment is down after demonetisation, and there are few buyers.

“This is not a good time to launch new sectors in Farrukhnagar and Pataudi,” said Mishra, adding that with few property buyers for even Gurgaon, finding buyers in Pataudi and Farrukhnagar would be very difficult.

He said with strict crackdown on unaccounted for cash and stringent rules under Benami Property Act, people have gone into wait-and-watch mode.

“The real estate market was driven by people who invested their excess money in real estate for quick returns. With uncertainty in the market, investors have gone into wait and watch mode,” said Mishra. Huda’s plan, to launch new sectors in Haryana’s other urban areas, has also been affected by the real estate slump.

“The plan to launch new sectors elsewhere across the state, is also likely to be postponed or delayed,” said senior Huda official.
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