Hyderabad is most affordable to buy and rent

HYDERABAD, 21/02/2013: Post Telangana impact on Hyderabad realty: Workers engaged in day-to-day work at construction site of skyscraper unmindful of formation of 29th state. Many fear that real estate will take a jerk, but it is still too early to gauge its impacts on the real estate industry. According to experts, the outcomes are still unclear, but Brand Hyderabad is not likely to be overly affected as it is planned to serve as a joint capital for ten years, and capital has immense growth potential and will get back into growth trajectory once things stabilize. Photo: Mohammed Yousuf

The real estate sector may be in a state of flux right now in Hyderabad! However, on the brighter side, the Capital continues to remain the most affordable to buy and rent, when compared to eight other top metros in India. A survey carried out Arthyantra Corporation in Delhi, Mumbai, Bangalore, Chennai, Ahmedabad, Pune and Kolkata, said the common capital of Telangana State and Andhra Pradesh has emerged as the most cost-effective alternative to metros.

As a cost-effective alternative, Hyderabad and Ahmedabad continue to be the most sought after cities for both renting and buying for people having annual earnings of Rs. 10 lakh and more, the survey said. Cities like Hyderabad today are offering good alternatives for Mumbai and Delhi-NCR based professionals earning similar annual salaries, the Arthyantra survey said. Even the purchasable area per Rs. 1 lakh has also increased for cities like Hyderabad, making it an attractive destination for buying a residential property. “Rest of the metros in India have seen decrease in purchasable area per Rs. 1 lakh, which indicates that the real estate market, by and large hasn’t seen significant growth despite interest rate cut by RBI and tax slab changes in the recent past,” the Annual Buy Vs Rent Report (ABRS) survey of Arthyantra said.

Apart from the market potential of metro cities, the survey has also made some interesting observations on the need for price correction in the sector because the sales are declining and leading to pile up of inventories. “Builders do not pass on the benefits of lower interest rates to the end user and are holding on to their prices while developers continue to launch spacious units, which has caused a mismatch in what the market wants and what is being developed and offered. It discourages price-sensitive individuals from taking a ‘buy’ decision on residential properties,” the experts said.

Some of residential and commercial areas that were included in the comprehensive survey included Banjara Hills, Begumpet, Kondapur, Tellapur, Kukatpally, Miyapur, Rajendranagar, L B Nagar, Tolichowki, Himayathnagar, Tarnaka, Uppal and Srinagar Colony. The report said that in a way stagnant real estate market has proved positive for Hyderabad.

“Since 2012, Hyderabad has been rated as the most affordable city both in terms of renting and buying a residential property. With a relatively stagnant real estate market, Hyderabad has become an attractive destination for purchasing a residential property. Over the past four years, the property prices have declined by 10.46 per cent while the rental values have increased just by 6.3 per cent during the same period. People belonging to any income groups can lead a comfortable lifestyle Hyderabad,” the ABRS report said.

To an extent, the bifurcation of Andhra Pradesh and formation of Telangana State hasn’t positively impacted the real estate market in Hyderabad.

“Nonetheless, Hyderabad keeps its first position for affordability to rent and buy. Also, on an average, an individual will take 3.4 years to accumulate the initial down payment, the lowest among the 8 metro cities.

The survey advised that persons having an average annual income of Rs. 9 lakh and above per year can plan to buy a residential property across most of the real estate development areas in and around Hyderabad.