Hyderabad: Looking for a flat? Before you browse classifieds or leading real estate websites, you should read this. Builders and developers believe the next three months will be a “jackpot period” for investors and wannabe home owners. Thereafter, though, it could get really expensive. You may agree or disagree, but the air was heated up with discussions like these at the first ever, Andhra Pradesh State Property Show 2012, organised by the Confederation of Real Estate Developers’ Associations of India (CREDAI) at the People’s Plaza on Friday. Formally inaugurated by Chief Minister N Kiran Kumar Reddy, the 3-day expo attracted hundreds of people on the first day itself.
A Jackpot Period ?
Terming the present scenario of real estate in Hyderabad and the State in general as a jackpot period, Shekar Reddy, president, CREDAI, told City Express that investors/ buyers in the last three years have been benefiting from the declining market. “Due to global recession, political situation in the State and the large supply of of construction material, the prices of apartments have gone down badly. Even at low prices, our builders were able to deliver projects at the lowest possible prices as they re-engineered their projects,” said Reddy. According to him, the real estate industry in the city is “in a transitional stage from being a buyers’ market to a sellers’ market as stocks are exhausting, making it the best time for investment ahead of further rise of the industry.” With exhausting stocks, Reddy predicts an escalation in the prices of both living and commercial spaces by 30-40% in the next three to four months. “Costs of all factors of construction like building material, labour, land etc are going up and in next three months, investments would become dearer,” he said.
Effect of Metro rail on escalation of prices
But these alone are not the causes for escalation of prices. “In LB Nagar and Uppal areas where the metro rail works are progressing, there is an escalation of at least Rs 5,000 per square yards (sq.yrds) in land prices. Prices of built up space have gone up by around 10%,” said Reddy. In response, NVS Reddy, Managing Director, Hyderabad Metro Rail, who was also present, said, “the government needs to promote affordable housing and transform Hyderabad into a world class city. And that cannot be done without the help of private parties. Hyderabad is bouncing back as a global destination and we are an affordable city. We just have to welcome the global community with open arms.”
Flats in the city affordable??
Chayan Mukherjee, senior marketing executive, Prajay Engineers’ Syndicate Ltd, an exhibitor and participant in the property show, said the city is far better affordable compared to Bangalore, Pune, Mumbai, Chennai etc. “A 2-BHK in Bangalore costs around Rs 60 lakh whereas in Hyderabad, one can get the same for Rs 20-25 lakh,” said Mukherjee. Adding to that, Reddy said flats were available for as low a price as Rs 1700 sft near Kompally, Karimnagar road, Alwal, Uppal, Dilsukhnagar, LB Nagar, Sagar road etc. Mukherjee said, “prices of living and commercial spaces in the city today are the lowest in the county. Hyderabad is better than even Chennai in terms of costs, quality and prices. In Hitec City, over 60% of the purchases are made by outsiders, which is a proof of acceptance of the city by others.”
But the inevitable question on everyone’s lips was will a renewed Telangana stir dent the prices and benefit home buyers? Many like Mukherjee conceded that investors will surely have a negative approach if the T issue is reignited but pinned their hopes on corporates. “Corporate/IT employees will benefit from the lowering prices,” he said.
So, which are the fastest growing localities in the city? Certainly the area around Gachibowli, Miyapur, Kondapur, Hitec City etc. “Due to the proximity to the Outer Ring Road (ORR) and Hitec City, investments are made near Gachibowli and the prices too are escalating day by day,” said the participants.
According to them, over the last two years, there has been an increase of 30-40% in land value as well as construction prices in the city. An investment right now will fetch an appreciation of 50-60% in both rental or sale value near Gachibowli in around one-and a half years.