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Sunday, Jan 23, 2011
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Real Estate & Construction
States - Andhra Pradesh
Hyderabad realty in consolidation phase
Prickly issue:Players say the market will see robust growth but price increases are out fornow. —
V. Rishi Kumar
The real estate market in Hyderabad is entering a phase of consolidation, after a relatively extended subdued phase.
Majority of builders continue to maintain prices, which had settled down to their lows in the last quarter of 2010 after ruling high in 2007-2008. End-users, having postponed purchases for some time, have begun to take a call on buying properties.
An interaction with some of the property developers shows that this trend is likely to continue. Also, most of the issues with regard to demand for a separate statehood have been factored, they say.
“Price rise at this point is a sensitive issue. No buyer would like to hear anything on that front at least for some more time,” said Mr S. Pochendar, Chief Operating Officer of Lanco Hills, which is developing a mixed development project with residential and office spaces near the IT hub of Hyderabad.
Ms Snehal Mantri, Director-Marketing of Mantri Developers, said: “The general outlook for real estate is positive even though there have been some concerns about issue of separate statehood. In fact, the market may get buoyant from April onwards as we enter the new financial year when people again take a call on real-estate investments.”
Mr R. Karthik, Chief Marketing Officer of Lodha Developers, said that the realty market shows a reasonably robust pattern in the past few months. There are some distinct patterns within the realty market across the country. While some markets such as Mumbai have shown selective price increases in the past couple of months, Hyderabad market continues to reflect a steady price pattern.
“If at all, this trend of steady prices is likely to continue for some more time. Possibly, we may see some builders taking a call from April next. Therefore, this phase is ideally suited for genuine buyers as they also have come to realise that prices have come to more affordable levels compared with highs seen in the past,” Mr Karthik said.
Mr C. Sekhar Reddy, Vice-President of Credai, said the New Year has begun on a very positive sentiment with people discounting various developments, including the demand for separate statehood. In the last three months and first three weeks this year, the confidence level is on a high.
During the past two months, several developers have announced new projects in Hyderabad. These include those of the Prestige Group, My Home, Vasathi Housing, Kirthi Constructions and Lodha Developers, among others.
Mr Pochendar said: “Pricing is a sensitive issue. The market is just picking up and any adverse news can affect the battered sentiment of buyers. If there is any move to do so, they will again stay away from fresh purchases. However, a couple of developers have announced marginal hikes in rates.
“With regard to commercial property, the builders are strategising and are likely to take a call on new ventures. In some places, there is some over-supply. But then it won't be long before new projects are announced. This would be necessary as IT companies, in particular, have begun to announce expansion and are recruiting in large numbers.”
Ms Mantri said: “From the Mantri perspective, we continue to scout for new projects and are also considering expansion of the existing project. The trend of fresh recruitments in various sectors of the economy, particularly the IT sector, augurs well for real-estate projects. This will trigger more interest and purchases.”
For nearly two years prices have drifted lower, but they have stabilised now. But the prices of inputs and labour have gone up. This may prompt some developers to take a call on gradual increase in prices as the current rates could be lower by about 20 per cent if you consider the costs, Mr Karthik said.
Referring to the commercial property demand, he said, “The market now seeks differentiated products. The customer, who is king now, wants what suits him rather than adjusting to what is available. Therefore, we have launched Supremus office space project in Mumbai and plan to come up with similar ones in Hyderabad later.”
Meanwhile, the long pending issue of a new owner for Maytas Properties has ended on a happy note. IL&FS has been chosen as the successful suitor by the Company law Board. Hundreds of buyers of properties in the Hill County project now feel secure that they will be able to move to their new home with the new management taking control.
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