DELHI : Available now: A dozen or so bungalows in the heart of Delhi. Nice, quiet neighbourhood. Lots of trees. Generous parking space. Few high-rises in close proximity. Suggested price of 150 crore and above said to be a bargain.
Several owners are keen on offloading pricey bungalows located in the area known as Lutyens' Delhi, named after the architect who designed the area and its buildings toward the end of the British Raj. Many of the homes have been in the market for almost a year now, but the owners haven't been able to shift them.
Not too long ago, any Lutyens' Bungalow Zone (LBZ) property would have buyers lining up around the block, but it's no longer a seller's maket.
Potential buyers are shying away as they are uncertain about the future, said Mudassir Zaidi, national director at property consultancy Knight Frank India, who has brokered deals in the area before.
No buyers for Lutyens’ Bungalows for fear of getting spotted by politicians looking for funds
The lack of interest is also attributed to the upcoming national elections, scheduled to be held in 2014.
"The fear of getting spotted by wily politicians for funds during an election year has slowed down deals," said a broker, requesting anonymity.
Consider this: An 8,000 sq yard bungalow on Tughlaq Road, close to Prime Minister Manmohan Singh's residence on Race Course Road, has been on the block for a few months now. Three bungalows on Prithviraj Road and two on Amrita Shergill Marg are also up for sale, recently joined by one on Ferozeshah Road. The Ruias of the Essar Group have put their Jor Bagh property on sale, adding to the supply in the area. Also on sale are bungalows in Golf Links and Sunder Nagar, the latter being the neighbourhood in which artist Subodh Gupta acquired a home for Rs 100 crore last year.
Only one deal is known to have taken place in the area this year - the Bharti Group's Rajan Mittal buying a bungalow on Amrita Shergill Marg through a court-appointed auction. It was regarded as a bargain at Rs 156 crore. Brother and group founder Sunil Mittal also lives on the same road, having bought his bungalow in 2002 for Rs 40 crore.
With LBZ homes in perpetually short supply and first-generation entrepreneurs clamouring to acquire these trophy assets, property prices in the area surged 8-fold in the past decade. The value of the part of LBZ that's privately held - around 254.5 acres and home to businessmen such as Mittal, KP Singh, Naveen Jindal and LN Mittal - has risen to Rs 49,000 crore from around Rs 6,100 crore in the past 10 years.
"Many of these sellers are in the market because of the unprecedented levels that prices have reached in the last few years," said Anshuman Magazine, managing director of property advisory firm CBRE.
The bungalow on Tughlaq Road, for instance, has many family members who haven't been able to arrive at a joint decision. Similar is the case with a bungalow on Prithviraj Road.
Nevertheless, seller expectations are high.
"Because of the rise in prices in the area, sellers like to go by massive values they have heard. The buyers quote at least 20-30% lower," said another broker, who did not wish to be named.
While there are some buyers willing to spend a few hundred crores, they are looking for better deals. Meanwhile, the slowing economy has hit formerly buoyant sectors, which had thrown up a handful of buyers in the boom times. In real estate, they included Shravan Gupta of Emaar-MGF and Kabul Chawla of BPTP besides others, who picked up homes in the area in the last decade or so.
Things are different now.
"Money in the market is dry and people today have better utilisation for their money. They want to keep their businesses alive," said Jaiwant Daulat Singh, director of Daulat Singh Consulting, which advises on high-value property transactions.