The Bengaluru Development Authority (BDA) has re-commenced auctioning its corner sites in various layouts. This comes two months after the Karnataka State Chief Minister B.S. Yediyurappa announced that around 12,000 BDA sites will be auctioned in a phased manner.
Since 2011-12, the BDA has been aggressively offering the plots for sale through e-auction. These are residential / commercial sites in well developed localities of Bangalore.
Bidding / e-auctioning is a hassle-free way to own a property, especially if want to avoid any sort of black money in real estate transactions.
Difference between BDA Allotment and Auction:
BDA has so far formed about 62 layouts in Bangalore. Bangalore BDA maintains a seniority list of applicants who has applied for sites in BDA layouts. After forming a layout, BDA generally allots the plots based on certain criteria and lottery system. The e-auction process is different to this. Any citizen of India can apply for auction. There is no lottery system. The highest price bidder of a particular plot will win the auction.
Response to BDA E-auction June – July 2020
BDA had successfully conducted e-auction during June – July 2020 for around 200 corner sites in the first phase. The E-auctions for sites at HSR Layout, Sir M. Visvesvaraya Layout, Banashankari, NGEF, J.P. Nagar and Rajajinagar.
My Observations on July 2020 e-auction :
- On the last day of Auction ie 7th July, 2020, the auction participants had faced technical outage. This has forced the BDA to extend the e-auction deadlines.
- BDA sold 166 out of 195 sites and earned Rs 210 crore. It bagged Rs 52 crore immediately as successful bidders had to pay 25 per cent of the site value in three day.
- BDA could sell 85 per cent of sites available for bidding. More than 2,500 people had participated in the July 2020 e-auction.
- BDA had cancelled the auction of 19 sites as the bids were less than 5 per cent above the price fixed. There were no bidders for 10 sites. BDA had fixed the price at 10 per cent more than the guidance value of the area.
Response to BDA E-auction July – Aug 2020
BDA had conducted e-auction during July – August 2020 for around 300 corner sites in the second phase. The E-auctions for sites were primarily at Sir M. Visvesvaraya Layout, Banashankari and Anjanapura.
My Observations on July 2020 e-auction :
- Unlike in previous e-auction, this time no major technical issue (server break-down) has been reported by the participants.
- As per the BDA around 1,600 persons took part in this e-auction. Bangalore Development Authority has earned Rs 172 crore from the sale of 240 sites through e-auction.
- Of 308 sites, 68 could not be sold due to various reasons. Yet, the auction fetched 65% more than the original price of Rs 103 crore fixed by BDA.
- Forty-five sites did not receive response from bidders, while 22 got less than 5% response and one was withdrawn from the process.
Latest BDA Plots E-auction 2020 (Sep – Oct 2020) Notification
BDA has now come up with the latest e-auction notification (September – October 2020) as part of the third phase of auctions.
The E-auctions for sites primarily located at Arkavathy Layout, Sir M. Visvesvaraya Layout, J P Nagar 9th Phase and Banshankari 6th stage commence from September 9th, 2020.
The last date to express interest of participation is 24-Sep-2020 to 1-Oct 2020 and the last date for closing e-Auction is 25th Sep, 2020 to 3rd, Oct 2020, depending the location of the site. (To avoid the technical outage, this time around as well, the BDA has kept different e-auction last day deadlines for different layouts.)
You may kindly click on the below image to download the complete and latest BDA e-auction notification (September – October 2020).
BDA Sites Online Auction Terms & Conditions
- Applicant should be a Citizen of India
- NRIs & Partnership firms also can participate in the auction
- Applicant has to pay Rs 4 Lakh per site as Earnest Money Deposit (Deposit amount is refundable).
- Successful bidder has to remit 25% of auction amount in 3 days.
You may download complete details on Auction Terms & Conditions from this link.
Advantages of buying a BDA Plot/site through auction:
- The bidding process is completely online (it is like stock market trading).
- The process is transparent. You can view the bid prices quoted by the other bidders on the screen.
- Most of the properties offered are corner plots.
- BDA layouts are comparatively well developed with good infrastructure.
- BDA Layouts have drinking water supply facility.
- You can easily fund the property deal through home loan.
- You are the first owner of the property.
- No issue of black money. The entire property deal amount should be paid through Demand Drafts (DDs) or money transfers.
- No Agent or mediator involved in the process. The entire decision making process is in your hands.
- Anyone in India (citizen of India) can invest in these properties.
- Different plot measurements are available ( from 400 square feet to 4000 sq ft and above).
- You may win the auction at less than the current prevailing market price (but this happens very rarely as BDA can cancel the bid, if its required).
- Auction notification has location and site map details. Hence it is easy to locate the property.
- In case, you wish to re-sell the property, you can do it immediately after the Registration of the vacant plot.
BDA e-Auction Procedure
Below is the step by step procedure to participate in BDA E Auctions;
- Visit this link ( BDA’s e-auction website)
- Click on ‘Auctions’ Option.
- Click on User icon on the respective Auction notification item.
- Click on “New user : Register”
- Fill your personal and bank details
- Pay Auction Processing Fees & Earnest Money Deposit of Rs4 Lakh (per site) online.
- If you do not win the auction then Rs 4 Lakh will be refunded to your bank account.
- Upload your Auction documents online.
- Agree to auction terms & conditions and submit your interest of participation.
- There will be Delta time of 5 minutes on the final day. The auction can go on till the time there is no new bid quoted before the end of the delta time (as shown below).
- The successful bidder has to remit 25% of auction amount to BDA in 72 hours.
- Generally BDA will give you around 45 to 60 days to remit the remaining 75% amount.
BDA E Auction – The entire process & Important Stages
The entire process from bidding to Registration generally gets over in 2 to 4 months. The below process flow gives you clear idea about this;
BDA E-Auction – Should you participate? | My opinion
For the last 9 years, I have been keenly tracking the e-auctions conducted by the BDA. To my knowledge, most of the auctions have been successful with high levels of participation from property investors.
Some bidders have won at the base price itself and some have won at crazy prices. Personally, I have participated in the e-auction in 2012 and won the bid.
Considering the current economic scenario and prevailing pandemic (Covid-19), it is to be seen if same level of participation happens or not.
If you are keenly looking for a property (vacant plot) for self-occupation and planning to settle down in Bengaluru then you may surely consider participating in these auctions. But, do not over-leverage your self by taking high home loan amount (if any). Also, advisable not to cross your budget limit during the bidding process.
In case, you are looking for a commercial site or for investment purposes, do not expect fantastic / abnormal returns (capital appreciation / rental yields).
As you are buying the auction property through WHITE money, you may get a compliance notice regarding ‘high value transaction‘, from the Income Tax Department for the respective Assessment Year. So, make sure you keep all the information related to your payments / source of funds, for future reference.
Are you planning to buy a property in Bangalore? Do you want more information on e-auction process? Then, kindly leave your comments below and I will be more than happy to reply to your comments. Cheers!
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(Post first published on : 20-June-2020)