Real Estate - DDA Housing Scheme'08

DDA flats - An excellent opportunity to invest

DDA is launching the Housing Scheme'08 on 6th August,2008. There are around 5000 flats on offer. See my post on highlights of the scheme. The question is " Should one apply for the flats under this scheme" ? Investment Guru is of the view that one should apply for the flats under the scheme. It's just like applying for an IPO in the stock markets. You are going to block Rs. 1.5 Lac of you funds and if you get allotment the gains would be significant. If you are cash starved there is another attractive option of getting the registration amount finance and wait for getting lucky in the draw.

Why is DDA Scheme attractive ?
The major attraction of the scheme is that the flats are being offered at a price which is around 30-40% lower than the prevailing prices in these localities. The chances of real estate prices going down in these location because of the lower prices offered by DDA is very low, since the number of flats on sale are quite low in comparison to the total real estate matrix of these locations. So an allotment in this scheme is going to generate significant gains for the investors. Real estate prices in locations like dwarka has seen consistent rise and has offered excellent gains to those who have applied in the 2006 Housing scheme. This time around too, people who get allotment are likely to fetch a premium in the range of 2-5 lacs on the DDA prices.

I don't have money for Registration amount ?
No problem. As soon as the scheme is launched you will see a flood of advertisements in the newspapers regarding banks and financial institutions offering loan for the Registration amount. In other words, If you don't have money for Registration or if you don't want to block your own cash reserves for this, you can avail a financing option from banks for registration amount. Banks generally come up with a scheme where they fix a Non-refundable amount for financing the Registration amount.

In 2006, Banks came with a Fixed amount of Rs. 5000 for financing the Registration amount. This year it may be bit more in view of higher interest rates. Suppose banks fixes Rs. 7000 this time around, it would mean that in lieu of putting 1.5 lacs of your own, you would pay nothing but Rs. 7000 to a bank for financing the registration amount. If you do not get allotment then Rs. 7000 would be your loss in terms of financing the deal. If you get allotment, it would a peanut considering the gains for your allotted flat.

I want to sell on allotment, Can I do so ?
There is an active market for trading once you get the allotment of flats under the scheme. So, if you didn't intended to hold on to the flat, but just wanted to grab the premium for allotment of the flat, you can sell the flat in the open market.

Related Posts
DDA Housing Scheme'08
DDA Website


Anonymous said...

Good post. Nice to hear about real estate investing on this blog.


Unknown said...

hi sir,
i am resident of rajasthan. can i apply for a dda flat ?

please guide.
thank you

Rajesh Soni said...

Thanks Vikram.

Mahipal... yes, all Indian citizens are eligible to apply prvided they do not hold any other DDA propperty. Only one application per family is allowed.

Anonymous said...

Hi Rajesh,
Really enjoyed reading ur blog! Keep it up. Just wanted to know if NRIs are allowed to invest in DDA flats too? Thanks.

Unknown said...

Hi rajesh

it would be great if you can post the application form for DDA scheme on your blog. I believe it will be published on 6th August. BTW....many thanks for such useful article on this topic.

Anonymous said...

Can NRIs apply for this ? I would think they can as they are also citizen of India.



Excellent post on real estate.

Kabob Recipes said...

Very thoughtfull blog