o the fantastic prices at recent land auction at Manikonda and Kokapet offer a whiff of hope for the real estate sector in the city after seven years of despair?
For the land parcels that went under the hammer, the Telangana State Industrial Infrastructure Corporation (TSIIC) got a windfall with successful bids touching Rs. 29.28 crore per acre. Justifiably elated, the Chief Minister’s office released a statement recalling that such high bids were not made even during boom time.
After the real estate boom between 2004 and 2008, it has been a downhill slide with an occasional bump, which a leading builder described as a ‘topsy-turvy’ situation. While global recession took its toll, local factors such as the protracted agitation for separate Telangana State led to prospective buyers fleeing the market.
While the creation of separate State rekindled hopes about property matters that took a centre-stage again, the same did not happen.
Particularly from mid-2008 till 2014, construction activity almost came to a halt for several projects and realtors found it difficult to offload even completed inventory. “During the boom, the builders did not factor in the possibility of a downslide and were taken in by surprise. The result was incomplete structures waiting for completion and completed structures waiting for buyers,” concedes a builder.
A positive mood in the property market which has been building up over the last six months has now become more apparent, says D.S. Prasad, Director, Aparna Constructions. “In recent months, the commercial space absorption in Hyderabad has been higher than Bengaluru and this obviously will translate into demand for residential spaces too,” he says.
Anand Reddy, Executive Director, PBEL Developers, agrees and says the acceleration in property sales has slowly yet steadily been building up and the acceleration will be more conspicuous now. “Among other factors, the State government’s efforts in supporting the sector, the IT Ministry to bring in investment and employment opportunities are paying dividends,” he says.
The present trend could result in coming up of at least 1 crore sft of IT space, which offers possibility of creating employment for one lakh persons in the coming years. “This will mean a spurt in the demand for dwelling units,” Mr. Anand Reddy predicts.
The average annual consumption of housing units, of all kinds from apartments to villas, presently hovers around 24,000 units, those in the construction industry point out that though the present scenario has supply exceeding the demand, the situation will change dramatically in the next two years.
P. Prem Kumar of Doyens Constructions says things have started appearing more positive from macro level in the city and argues that it was bound to happen. “Despite everything, Hyderabad offers the most affordable pricing among all the metros of the country and the infrastructure here is unmatchable,” he explains.
The Greater Hyderabad Municipal Corporation (GHMC) has reported a rise in revenues collected from various fees from construction activity and the registration department data too has shown an increased activity. Since January this year, property prices have also been on the rise, albeit marginally in most places, and more in places such as Miyapur and Gachibowli, where the prices have spurted from 5 per cent to 8 per cent than last year.
The Confederation of Real Estate Developers’ Association of India (Credai) former chief, C. Sekhar Reddy, says unsold stocks that had piled up earlier were already cleared and the fresh stocks are finding new buyers. “There are no speculators in the field now and the sector is growing steadily, healthily and strongly,” he avers.
The acceleration in property sales has slowly, yet steadily, been building up and it will be more conspicuous now
Anand Reddy
Executive Director, PBEL Developers
