HYDERABAD: The sluggish movement of the real estate market notwithstanding, the sale of 'second hand homes' in the city has seen an impressive growth over the past few months.
Industry insiders peg the jump to anywhere between 15% and 20%, and attribute the trend to the poor availability of "quality products" in Hyderabad at present.
According to them, this northward movement is likely to continue until "fresh stocks" hit the real estate market, probably by the third quarter (around Diwali) of the next financial year.
While the demand for resale properties is predictably the highest along the city's western corridor that houses the IT industry - stretching along Hi-Tech-Madhapur-Gachibowli - stray sales have been reported from other pockets of Hyderabad, too. "Within the core city limits, for instance, there are houses that are in huge demand for two reasons: the location and the lack of space for new projects to come up," said Murali Krishna, a real estate agent, who has sealed multiple resale deals of late.
As per rough estimates, the average rate of these properties range from Rs 4,700 to Rs 5,500 per square feet (sft).
"This trend is only natural given the prevailing condition of the sector in Hyderabad. In the absence of new projects being floated, buyers have limited options to choose from. They are, thus, turning to resale homes, especially those located within gated communities," said AS Sivaramakrishnan, head (residential services) of CBRE South Asia Pvt Ltd, an international real estate services firm. While he maintained that the sale of second-hand homes is usually a continuous process, he confirmed to a visible increase he was witnessing in business in the last couple of months.
Seconding the observation, managing director, JLL (Hyderabad), Sandip Patnaik, further elaborated: "Due to the slowdown that the local market has suffered, customers are no longer confident of investing in projects that are in the initial stages of construction. It is either ready-to-occupy units or resale homes in good condition, which are doing well now. As the former is scarce, the latter is doing well."
He also pointed out how such deals are profitable, both for the buyer and the seller. "A property in Hi-Tech City that a customer bought for Rs 3,500 per sft about 3-4 years ago, for instance, is now priced at Rs 5,500 per sft and upwards. While that's a decent rise for the seller; for the buyer too it is fair deal given the project is complete and ready to move in immediately. There is no burden of paying EMI and rent at the same time, as would be the case if he signed up for an under-construction venture," Patnaik observed.