Developers pin their hopes on new governments to revive demand
The real estate sector in Hyderabad and surrounding areas has been in a pause mode for several quarters.
Concerns over the formation of Telangana and lack of clarity on how things will unfold prompted buyers to put off decisions.
Both capital and rental values have remained stable for far too long even though the cost of construction has spiralled by about 30 per cent in the past 24 months.
Hopes on new govt
Builders are pinning their hopes on the new government and expect the sector to gather momentum. Interaction with some of the players in the sector, including representatives of the real estate bodies, shows that a 100-day development agenda will play a role in improving the sentiment of both the buyers and the developers.
C Sekhar Reddy, President of the all-India real estate body Credai, said, “The real estate scenario in Hyderabad and the State is passing through a tough phase where the prices have remained stagnant and are about half of Chennai and Bangalore. The uncertainty on the Statehood and the agitations were responsible for such a situation.”
“The new government should set a 100-day agenda and address the issues. This will not only help take up new projects but will also bring in a positive sentiment in market,” he said.
P Dasarath Reddy, President of AP Real Estate Developers Association, said the uncertainty in the sector seen in the past four-five years because of the agitation for the new State is now over. The new government will bring in a positive sentiment and encourage people to buy properties and also prompt some to get back to speculative buying.
“After a prolonged pause mode, we believe the prices are in for correction by about 15 per cent as they have remained stable for far too long in spite of input costs going up,” he said.
Anand Reddy, Managing Director of PEBL, said, “In the last few months, people reconciled to the situation and accepted Telangana, which is a reality. During last few months, non-local, non-Telugus were in the hunt for properties. We expect Telugus and locals to get back to buying mode after the formation of the new government.”
From a buyer’s perspective, the realty sector players say that this is the right time to buy as it is still a buyers’ market. This situation may not last long, they feel.
The property prices in Seemandhra region are beginning to see an ups wing as there is expected to be a lot of construction activity as new infrastructure is created for the new State capital.
Reports indicate that property prices in Vijayawada-Guntur, where the capital of Seemandhra is expected to come up, are beginning to firm up.