After riding the crest of the boom and then surviving the bleak scenario, builders are hopeful of better business prospects this year, writes T. Lalith Singh
A New Year ushers in new hopes, aspirations, goals and a lot of resolutions. Looking back at the year that has just slipped into past and having floated with its highs and downs and learning from the good and bad of it, one seeks to look forward with renewed anticipation.
So what does the Year 2012 could mean for the real estate in the city? After riding the crest of the boom and then surviving the bleak scenario presented in months that followed it, builders have banked their hopes high on business prospects this year.
One anticipation making round in the industry is about the possibilities of the market, which last year remained in favour of the buyers, tilting towards the sellers. Is the year 2012 going to usher in the market for seller? Most in the construction business look at this possibility taking a shape given the present scenario and popular mood towards the real estate.
One of the builder points out that the cycle will continue to go round, as in any business, and if last year was commanded by the end-users, then present trends hint at the market slowly moving in their favour. “It is not a mere wish from us but the ground realities look poised towards completing the cycle and coming back to us,” he says.
The Confederation of Real Estate Developers' Association of India (CREDAI) India Vice-President, C.Sekhar Reddy concedes, “available stocks in the city are fast getting exhausted while not much of new stocks got added last year. This is going to be a factor to consider”.
In the wake of G.O.45 on earmarking a slice of built-up area for Economically Weaker Section (EWS) and Lower Income Groups (LIG), not many new permissions for were either sought or new projects got launched. This too to some extent contributed in limiting the available housing stocks in the city by way of stopping fresh supplies joining in.
“The Government in a way is contributing to the short supply of housing and thereby escalating the property prices,” quips another builder.
He also reminds that different builders association and bodies have made repeated pleas to the government to resolve the issue and if required, modify it in terms more agreeable to all concerned.
Other contentious issues that the real estate has been after the government relate to rationalisation of taxes and ushering in single window clearances. “At present an end-user is paying around 36 per cent to 40 per cent for different taxes and if the government is really keen on affordable housing, it should rationalise it at least this year,” the builder says.
The general perception as to how the home loan interest rates could fare this year happens to be more in favour of a drop, perhaps by the mid-year. Hints at possibility of home loan interest rates softening were emanating from different sources, they say and add that they are prepared to put their money on it. “We have already reached the peak. Now there is no other way but to curve down, at least a bit,” predicts one.
The focus now could be primarily on the domestic buyers but the real estate sector is also hopeful on the NRI buyers picking up more properties this year. “Given the dollar status, it is a good opportunity for them,” points out Mr. Sekhar Reddy.
Also, it is generally mentioned that property prices in the city have hit a rock bottom and unlike other cities, did not bounce up that fast.
The pricing here continue to remain lowest and it is observed that this fact might help Hyderabad in attracting investors as well as actual end-users this year.