As Telangana reached its one-year milestone, the real estate sector in Hyderabad appears to have given up hopes of a quick recovery of fortunes and instead remains content with slow and incremental growth.
Real estate activity, which relished the boom period of 2005 to 2008 with large scale construction work in and around the city, was left with a bitter taste during the global recession followed by the agitation for a separate State. Construction activity almost came to a grinding halt and builders were left with unsold inventories piling up in large numbers.
The coming of Telangana last year was seen by most in the building community as ushering in a new dawn for the construction industry and hopes were pinned on a quick revival being just a matter of months. Most predicted real estate activity to start flourishing by December 2014. However, that was not to be so.
But then, the builders do not really seem perturbed at their calculations having gone awry and express satisfaction at the slow growth that has been registered in the last one year. “Agreed that business for us is not in the fast mode but at least we are slowly moving out of standstill status,” says P. Dasarath Reddy, president, Telangana Real Estate Developers Association (TREDA).
According to city builders and developers, there has been a steady, albeit incremental growth in enquiries and footfall at project sites, particularly in the last six months. “If not euphoric, the mood is definitely optimistic. Unlike earlier years, enquiries are converting into sales but the conversion rate has to go up,” observes Anand Reddy, co-founder, PBEL-INCOR.
C. Sekhar Reddy, national president of Confederation of Real Estate Developers Association of India (CREDAI), says, “There is a positive movement in sales and a rise in enquiries. A small push along the line will bring real estate back into the reckoning.” The Greater Hyderabad Municipal Corporation (GHMC) according sanction for 1,100 building plans in March shows that construction activity is returning to tracks, he says.
The State government’s steps aimed at improving conditions of Hyderabad are cited as factors that will help real estate surge ahead in the coming months. “The government has narrowed down its focus on key issues of power, water and roads and this is going to push the city back in the centre-stage,” remarks Mr. Anand Reddy. Recent announcements on Google, Amazon and few others on setting up and expanding base in the city also added to the buzz, says Mr. Sekhar Reddy.
Property prices remain low
Despite a very marginal rise in the last one year, property prices in and around the city continue to remain very less compared to most other metro cities. Apart from all other attractions, a builder points out, the icing on the cake here happens to be the low pricing.
C. Sekhar Reddy, CREDAI president, puts the average property pricing in the city as ranging between Rs.3,500 and Rs.4,000 per sq ft. “In locations such as Kompally, Alwal and Bollaram, good residential properties are available at Rs.2,000 per sq ft too,” he says.
The preferred locations for property seekers continue to be Madhapur, Gachibowli, Tellapur and Miyapur. Limited stocks at Banjara Hills and Jubilee Hills command a pricing of Rs.8,000 to Rs.9,000 per sq ft while Madhapur and Gachibowli properties are ticketed between Rs.4,000 and Rs.5,000 and along locations such as Miyapur, which are picking up fast with the Metro Rail project, the price tags vary between Rs.3,500 and Rs.4,000 per sq ft. “Prices vary based on location, amenities provided and the present status of construction,” says a builder.
Interestingly, plots which went out of favour when compared to constructed property few years back, appear to be staging a comeback. Outlining the emerging trend, a realtor says property seekers were evincing interest in HMDA-approved plots at places beyond the outskirts such as Mancherial, Adhibatla and Narsingi.