HYDERABAD: The real estate sector in Hyderabad has changed dramatically over the past two decades riding on the growth mainly of the IT sector and other services sectors, including telecom, transport and financial services.
The setting up of the Hitec City in the 1990s during the Telugu Desam regime provided the trigger, and thereafter the line up of global IT majors such as IBM, Microsoft, GE and Oracle and most of the top Indian IT firms lead by TCS, Wipro and Infosys has resulted in the creation of Cyberabad.
In the services sector, it is said that for everyone IT job, four other services sector jobs are created. In a city with an estimated population of about 75 lakh, the IT sector alone employs about 2.5 lakh people. Given this huge addition in the services sector, there is still potential for growth of the real estate sector, according to players and real estate associations.
Two broad areas
The growth of the real estate sector could be largely split into two broad areas – one prior to 2006 and the other after 2006 marked by major boom, sudden collapse in 2008 due to global economic slowdown followed by the real estate collapse.
Hyderabad real estate was also impacted by the ongoing agitation for separate statehood, which has kept prices under check.
Shekhar Reddy, President, CREDAI, a real estate body, said during the 1990s and 2000-05, the compounded average growth was about 20-25 per cent. But this changed rapidly during 2005-06 with the entry of number of companies setting up their units triggering huge demand for real estate.
The growth of the sector coincided with the setting up of large commercial hubs around the city. With the State Government developing city infrastructure, and now boosted by the development of Hyderabad metro rail project, it has become an attractive place to invest as the cost of living is low and real estate continues to be affordable, he said.
The completion of the mega Rs 16,500-crore metro project by 2017-18 is expected to boost transit-oriented development along the 72-km stretch.
Traditionally, real estate has some component of speculative buying. This is something missing in Hyderabad. This is also one of the reasons for property prices continuing to be relatively lower compared with Chennai, Bangalore and Pune.
P. Dasarath Reddy, President of Andhra Pradesh Real Estate Developers Association, said that the development of the Outer Ring Road, radial ring roads, setting up of new international airport, the metro rail, and expansion of the city into new areas has attracted more companies.
In a city that was known for small builders taking up construction of apartments in the range of 16-50 and going up to 100, the situation after 2006, where building norms were relaxed, attracted large number of national builders such as DLF, Mantri. The size of the projects too has gone up to about 1,000 apartments.