The Hindu Business Line : TRS stir may force realty `correction'

Will the resignation of Telangana Rashtra Samithi Ministers from the Union Cabinet and threat by the TRS President, Mr K. Chandrasekhara Rao, to launch an agitation for a separate State put brakes on the zooming real estate prices?

Reports already indicate that real estate transactions in places such as Jubilee Hills and other key areas came to a standstill on the day the TRS Ministers resigned.

Opinion, however, is divided whether these developments could lead to a crash in land prices in and around the State capital.

"Yes, land prices have dipped by 10-20 per cent in the last two days. High value transactions have come to a standstill," a senior builder and FAPCCI functionary told Business Line.

He also said that a correction, as it happened in the stock market, was due after the irrational and unreasonable hike in the last one-two years.

DIFFERING VIEWS

Mr C. Shekar Reddy, Vice-President of Confederation of Real Estate Developers' Association of India (CREDAI), however, differed with this view. "The Hyderabad real estate market has evolved into a global market. I don't think that the present developments could impact it. The important parameter for the companies that are coming and investing here is the cost of the end product. What matters to them is availability of manpower and other attributes that give them competitive advantage," he said.

Another veteran builder, however, felt that land cost would definitely come down if Telangana happened. He cited the sudden spurt in land costs along the Vijayawada-Guntur stretch soon after the formation of TRS and its tie-up with the Congress Party. That was based on the far-fetched assumption that if Telangana got separated, there would be an exodus of people ofAndhra region from Hyderabad.

"Land prices there went up five times overnight. But within months the bubble burst, leaving many in huge losses," he said.

The present developments were largely viewed as not a real threat. He, however, admitted to the fact that there was a pause in land dealings, following the recent developments, he added.

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