Will Political Stability in Hyderabad Boost Real Estate? For the property developer from Hyderabad, the decision to form India’s 29th state marked the end of a long period of uncertainty that had undermined business growth in what was once a booming real estate market in the country’s fifth largest city. His elation manifests that of almost all the property developers in Hyderabad who now expect to reap the benefits of this newfound political stability. There is renewed hope that this decision will spur economic growth in the city, which is home to the Indian headquarters of Microsoft, Google, Facebook, Amazon and Yahoo. The Worst Is Over “After the subprime crisis in the United States, property prices in all the metros in India had crashed. While prices recovered in those cities, Hyderabad missed out on the boom. The Telangana protests forced corporations to rein in their expansion plans,” says C Shekar Reddy, president of the Confederation of Real Estate Developers Associations of India (Credai), a national body that represents property developers. Shekar Reddy believes that the worst is over, and that Hyderabad could well be on the path to rapid growth. “A plot of land in Hyderabad, which was similarly priced as those in Chennai and Bangalore in 2007, is now 25-40 percent cheaper than those in comparable locations in the two southern cities. Hyderabad has good civic and social infrastructure, and this will bring back investors,” he says. But there is a twist to the tale. Even after the Centre’s in-principle approval to the division of Andhra Pradesh in 2009, property prices in Hyderabad did not recover as expected. Reason: Hyderabad had a land surplus and low demand at that time, creating a buyers’ market. But by 2013, builders had exhausted land resources, and started going slow on new projects. This has re-established equilibrium, says Shekar Reddy. Property rates have risen by about 30 percent in one year. Shekar Reddy attributes this to high input costs and low supply.
Posted on: Mon, 23 Jun 2014 08:22:42 +0000
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