HYDERABAD: The 'sick' realty sector in Hyderabad heaved a huge sigh of relief on Tuesday, with the Parliament finally giving its nod to the T bill. Developers and realtors alike, rejoiced the end of political uncertainty in the city, which they stressed was at the root of the crisis prevailing in the property market over the last few years.
While industry insiders were divided on the issue of Hyderabad losing some of its business to other major cities in the Seemandhra region hereafter, they unanimously maintained that the joint capital would see a drastic correction in realty rates that had touched rock bottom lately.
"In the next two years, a revision in price is bound to happen. Right now we are selling at 60% of the rate that's prevalent in Chennai and this needs to be corrected soon," said C Sekhar Reddy, national president, Confederation of Real Estate Developers' Association of India (CREDAI). Given the cost of living in Hyderabad (cheaper than most other metro cities) Reddy said he was optimistic of the local market pulling impressive investments in the future.
Sandip Patnaik, managing director, Jones Lang Lasalle (JLL-Hyderabad) predicted a similar trend. According to him, the sector is expected to see an immediate northward growth in rates, of anywhere between 5% and 10%. "Post election, this is set to rise further to touch 15-20%," he added.
And this, sources said, would be irrespective of a temporary stagnation that the industry might face for a short three to six month period. "Due to immediate sentiments (over the T bill), the market may see some people holding back their investments for sometime. But given Hyderabad's potential as a realty hub, that will change soon," said Mahavir P Agarwal, chairman, Koncept Ambience.
Outstation developers too confessed to their faith in the local market and insisted that their projects in Hyderabad would continue undeterred. "As a business house, all we are interested in is returns. So given that the IT& ITeS industry, which has the highest buying capacity (of Rs 4,000 per sft and above), in the city, there is no question of us moving out of here. In fact, now with clarity on the bifurcation issue, we are ready to go all out with our projects in the city," said R Suresh Kumar, head of Hyderabad operations of the Bangalore-based Prestige Group.
While investors, especially those hailing from the Seemandhra region, are expected to put some of their money in their 'home ground', but that is unlikely to hamper the city's growth, experts reiterated. "The decision augurs well for both sides. Of course a lot of pockets in the Andhra region will now see development, but that will not be at the cost of Hyderabad. That's primarily because the capital city generates maximum employment at present. It will take a long time for any other city to even come close to it," elaborated Ashwin Rao of Manbhum Constructions.
What would also work for Hyderabad is its "world-class infrastructure" - complete with the IT corridor and Outer Ring Road - said D S Prasad, director of Aparna Constructions. "Also, there are a lot of government policies that investors in other cities (in Seemandhra) will have to battle before working on turning them into realty hubs," he added.