DDA flats:Little change in Drop-in-river allotment

Swapan Chakraborty is disappointed.

He has been applying for the housing scheme of Delhi Development Authority for years without luck.

Last year, he bought a form for his friend, who got a flat. This year, he bought a form for a friend in Kolkata, who got lucky.

Chakraborty swears he will never buy forms for his friends again.

B B Walecha has been applying for the DDA scheme since the 1980s. This year, four members of his family applied, but no luck.

Walecha, who stays in his house in Noida, has been looking for a more spacious one. ''The majority of the applicants (90 per cent) are investors.

"Only 10 per cent people are needy but they don't get it," he said.

Yet, Walecha doesn't plan to buy another flat in Noida or elsewhere, as he's not sure about buying it from a builder.

Historically, DDA flats were offered at lower-than-market rates and, hence, they provided quick upside.

Abhishek Iyer was allotted a flat in Delhi's Vasant Kunj for Rs 22 lakh (Rs 2.2 million) last year; within seven days, he had calls from brokers offering double the price. Iyer, who stays in Singapore, has retained the flat.

Nearly 700,000 people had applied for 16,000 DDA flats in 2010, the draw for which was held on Monday.

"Whenever something is offered at a controlled price, the response is huge," said Geetamber Anand, managing director, ATS Greens.

"But it will not change the market or  prices; 16,000 flats is just a tip of the iceberg.

"There's a huge shortfall."

Anshuman Magazine, MD of CB Richard Ellis, believes this won't have any significant impact on the demand or prices.

"People apply

for DDA flats as they provide a quick upside; they are readymade apartments, so there's no construction or delivery risk; they are more affordable and the title is not a problem," he said.

Some developers feel buyers who have been holding on, pending the DDA draw results, will now enter the market, which augurs well for developers in Gurgaon, Noida or Faridabad.

"Many people are moving out of Delhi for a better lifestyle, which they can't afford in Delhi," said a senior executive with BPTP.

Magazine feels there's demand, but at a price point.

Besides, given the investor-nature of the applicants, not many unsuccessful applications may get converted into demand for housing in Noida, Gurgaon or Faridabad.

"It's not a very big deal. It won't impact prices or demand in any significant manner," said Kunal Banerji, president, M3M.

In affordable housing, a lot of supply is expected to come in Noida and in Sohna Road, Gurgaon The demand-supply is balanced and prices are competitive.

Besides, the psychographics of the customers buying a flat with a private builder and DDA are different.

"Anyone who has made it a little bit in life is out of the DDA culture. They are looking for a better lifestyle with a pool, spa and some style," he said.

So, even as 16,000 people celebrate their luck, it won't make a huge difference to the real estate market in Delhi or in its suburbs.