Telangana factor is giving uneasy moments to the industry limping back to normalcy

post-recession

HYDERABAD: Any news these days seems to be bad news for the real estate industry. The construction activity which blossomed so effectively for a few years has been in the dumps for the last few months and nothing seems to be going its way.

After the crushing effects of global recession when the industry was limping back to some sort of normalcy, if not the actual boom phase, the Telangana agitation again came back onto the centre stage. And as it cast a shadow on the real estate whenever it gained prominence earlier, the T-factor now too is giving uneasy moments for the industry.

However, while a section of the builders are apprehensive about the way the issue could end up the industry in ultimate analysis, others seem to be more pragmatic about the scenario.

“The property prices are almost on the verge of hitting the rock bottom leaving builders in despair, what more could happen now?” points out one.

Small builders and those who are on verge of initiating new projects could find themselves in a quandary over the situation developing from agitation launched by the Telangana Rashtra Samiti (TRS). Says a builder, “We waited with a project for almost six months hoping for real estate to pick up and now this came up. A few days of more wait is not going to harm us.”

Shift in focus

These developments incidentally are taking place at a time when several of the big builders had come up with more appealing property options, incorporated a more reasonable pricing and focus shifted to affordable housing which started spurring interest among buyers.

“It was returning to normalcy and arriving at a reasonable pricing, housing for middle and salaried class is on offer now. Hope, the present situation does not affect the prospects,” prays a builder with project on the city outskirt.

Ups and downs

The industry has seen many ups and downs in the last three years and has started acquiring certain resilience which will help it tide over the present conditions, hope Y. Kiron, CEO, Suchir India. New planners might wait and those actually in the process of buying a property might be tempted to hold back for few days but not more.

“Since speculators are out of the scene and only actual buyers are there, these issues might not have much affect,” he feels.

Except for the land cost, other expenses including statutory payments to the government by a builder or developer are not going to change, happens to be the logic.

“Land cost might come down marginally but it will not impact the overall cost of a project which can help one offer a considerable slash in pricing,” adds Mr. Kiron.