Will the elections end the fence sitting in Hyderabad?
Apr 25, 2014
Source : The Times of India


HYDERABAD: With the general elections going on in the country, every state seems to be in a revival mode. People are up for a change and are looking for some fresh policies and reforms. Hyderabad goes for polling on 30th April. Despite being one of the best livability options in the country, uncertainty over the political factors took a toll on Hyderabad’s property market. Most of the buyers have become fence-sitters and have left the decision of buying a property on the election results and future potentials. Buyers are expecting the new government to set the mood right by waiving off uncertainty, while the builders are expecting a positive property trajectory by getting clearances for the unfinished and awaited projects.

Aju Thomas, president, Trinity Partners, says, “We feel that in past six months especially the residential market has started showing signs of improvement and has gradually kept improving. Post clearing of the bill, most developers have increased prices. Currently, some apartment projects in the suburbs are almost touching one crore price.” The industry depends on the new government to provide a hindrance-free operating environment and there is a sense of hope among the developers for a positive post-poll scenario. Srinivas Reddy, owner, Rajapushpa Properties, says, “It will take two to three months for people to react, absorb the functioning of both the governments and realise the worth of property in Hyderabad.”

Trivita Roy, AVP- Research and REIS, JLL India, explaining the post-election scenario, says, “There is a lot of optimism about the post-election scenario and most of the people feel that the new government will boost the business sentiments in the city. Pro-development policies are the need of the hour to boost investment in Hyderabad. The new government will have to work towards improving the brand value of Hyderabad which has got shadowed over last few years due to the political instability. However the real impact of the new government and their policies can be seen only after 9-12 months post elections.”

The word ‘uncertainty’ has been doing rounds from past few months and has become one of the factors for the property market to sustain. Hyderabad has been waiting for stable political environment for quite some time now and post -elections a stable government is likely to be established which will end the uncertainty. Thomas explains his view on the same, “We think fence-sitting is mostly by investors. Such investors first kept waiting for the central government’s decision and now are waiting for the election results. The end-users are already in the market buying ready to move in properties. The prices in this market are very attractive and offer a significant value proposition and opportunity for escalation.”

Not only have the residential properties, the commercial properties also saw an upward trend. In the same period, the commercial market has also showed signs of revival. Most of the operational projects in HITEC city have negligible percentage of vacancies. A few large leasing and sale transactions have also been completed in the HITEC city area. New companies are back looking at Hyderabad as an office location. Some companies that had closed their Hyderabad office earlier due to the ground situation then are also back in the market to restart operations.

According to a JLL report, Hyderabad and Kolkata saw better absorption levels than in 2013, but witnessed a sharp rise in mall supply that led to a rise in vacant stock. Hence, for the next three to four quarters, growth of rentals and capital values in retail will largely remain stagnant.

Fast fact

Pre- elections the real estate investment sentiments are lukewarm and there is not much activity in the Hyderabad real estate market. Investors are in a fence-sitting mode and are keeping a close watch at the market movements to take decisions accordingly.

How much is brand Hyderabad likely to suffer due to the partition of state and administration of two different governments? BVP Raju, an APRA Member and a consultant for Ghar4usolutions, says, “With respect to manufacturing industry, the possible jobs will move away from Hyderabad and industrial lands outside Telangana may show a steep rise. However, constructed real estate, mostly driven by IT sector will not suffer.” Srinivas Reddy seconds his view, “Brand Hyderabad won’t be affected even after the division of states. Hyderabad provides a third of the employment in the state. The brand wasn’t built in a day and for any other city to reach its level, it will take minimum of 10-15 years. In terms of livability, Hyderabad is in the league of cities such as New Delhi, Mumbai, Kolkata.”

Not only regular properties, buyers are also looking for unique concepts such as luxury townships. KV Rajnarayan, GM marketing, Ramky Estates’s Discovery City which won a global award in 2011 for its concept township design, says, “People are now looking at future potential of areas such as the ITIR and investing in projects which are lifestyle offerings, not just an individual home.”

Both the states will have new governments who ideally would be focused on developing their respective regions. Hyderabad is the cheapest city in the current state of Andhra Pradesh today. It
would gradually become the costliest city in terms of property prices and is likely to move on to compete with other metros in terms of pricing, launching of branded residential projects and further commercial projects.

However the fact remains that with the division of state, the Seemandhra region needs to be developed rapidly to accommodate the functional changes. Analysts feel that due to the previous lull in Hyderabad’s market, the markets of Vijaywada, Visakhapatnam, Nellore, Ongole etc. have seen good increases in property prices. Apart from Hyderabad and its suburbs, the new state capital city will see a lot of activity in the coming future. Some of the important tier-II cities within both the states are also likely see positive momentum.

Trivita Roy explains “There is a lot of inquisitiveness amongst people to know which town or city will be the new capital of Seemandhra. Based on this many cities in the coastal Andhra regions are witnessing immense speculation in property markets. They have witnessed significant increase in property prices and launch of new real estate projects due to this speculation. But until the new capital is declared it is very difficult to say which city will be getting maximum benefits. However, Visakhapatnam, Vijayawada and Tirupati are the only cities other than Hyderabad who have air connectivity. Therefore these cities are most likely to be in focus.”

So, sticking to the view that the property prices will show an upward trend what is the rate of appreciation one can expect? Srinivas Reddy says, “It is the right time to invest because once the elections are over, within a few months the prices in Hyderabad may appreciate by 15 to 20 per cent.”

“Both the states will complement each other based on their existing and upcoming infrastructure developments. However this depends on how proactive each of these state governments will be to attract investors in their respective states,” Trivita Roy summarises.

Latest Realty News

Right time to invest in Hyderabad realty
Apr 20, 2014
HYDERABAD: Hyderabad’s real estate market is picking up momentum. The growth of financial districts, IT parks, educational institutions and malls has added to this growth. The outlying stations sandwiched between Gachibowli and BHEL, with little development and availability of vast open lands, have steadily been lapped up by construction companies. Nallagandla and adjoining Tellapur have transformed into a residential-cum-commercial hub. Last year the launch of the metro, with its well-connected
How to plan your property purchase
Apr 19, 2014
HYDERABAD: Home is where the heart goes the popular adage. It’s one of the biggest and probably the most significant investment that entails a lot of planning. The word planning does not necessarily mean mobilisation of funds or scouting for the best home loan offers.
Right time to invest in Hyderabad realty
Apr 18, 2014
HYDERABAD: Hyderabad’s REal Estate market is picking up momentum. The growth of financial districts, IT parks, educational institutions and malls has added to this growth. The outlying stations sandwiched between Gachibowli and BHEL, with little development and availability of vast open lands, have steadily been lapped up by construction companies. Nallagandla and adjoining Tellapur have transformed into a residential-cum-commercial hub. Last year the launch of the metro, with its well-connected
Miyapur-Chandanagar: North-west expansion of Hyderabad
Apr 16, 2014
HYDERABAD: The spill over effect of Madhapur, Kukatpally and the gradual north-west expansion of the city has brought Miyapur-Chandanagar belt into the limelight. It has gone through a transformation over the years, from sparse residential colonies housing employees from the nearby industrial localities into a bustling residential and commercial centre. It has been one of the rapidly growing suburbs in the city post 2006-07. Proximity to the IT corridors and improving infrastructure facilities h
10 taxes you should know about
Apr 15, 2014
HYDERABAD: Taxes, along with taxation rules are one of the most complex and confusing topics of any financial system. This complexity arises because of different types of taxes with different tax rates and continuous amendments in the taxation rules which are retrospective and prospective at times. Through this article, we will try to figure out different types of taxes levied in Indian financial system and their effects.
Capturing opportunities in the complex real estate terrain of India
Apr 15, 2014
HYDERABAD: Real estate is an asset class that demands specialised skills and the complexity surrounding this sector, increases in the Indian context. Compared to the mature real estate markets in the developed nations, buyers in India need a higher degree of diligence before entering into property agreements. Issues pertain to ownership rights of the property, understanding the difference between usable area and saleable area in the absence of standardised definitions, completion of the project
Realty sector creating avenues of employment in Hyderabad
Apr 15, 2014
HYDERABAD: Infrastructure growth has been playing a vital role in providing employment in both organised and unorganised sectors in India and Hyderabad in particular. In fact after agriculture, real estate sector is the second largest creator of employment. In Hyderabad several large scale housing projects have come up in the last five to ten years and there are many more projects which are in the pipeline. Several supporting infrastructure need to be built for these projects such as water suppl
Cyrus Mistry's family owned company accuses its attorney of fraud, illegal land sales
Apr 12, 2014
HYDERABAD: A company owned by the family of Tata Sons chairman, Cyrus P Mistry, has accused the attorney it hired to take care of issues related to properties it bought from the Hyderabad Nizams of fraudulently selling them.
Draw Policy for Assets Deal: RBI
Apr 11, 2014
HYDERABAD: The Reserve Bank of India urged banks with offices abroad to formulate a policy for overseas real-estate transactions.
New age homes in Hyderabad
Apr 11, 2014
HYDERABAD: Most of the builders in Hyderabad are of the opinion that today’s house buyer is smart and wants value for money. When a consumer comes to a property exhibition he is fully prepared and ready with his research, and he knows what he is looking for in a house. Today the expectation of a regular buyer is much more than what it used to be five to ten years ago.

Latest Realty News Of State

Realty Talk's