Despite the current political turmoil over division of Andhra Pradesh, the real estate market in Hyderabad is positive and the prices may even go up by 20 to 25 percent in next six months, said Confederation of Real Estate Developers Associations of India (CREDAI).
According to CREDAI national president C. Sekhar Reddy, the decision to bifurcate the state has cleared the air, bringing in stability in the market. He told reporters here Thursday that the new projects were being launched with higher prices.
He believes Hyderabad as a joint capital (of Telangana and Seemandhra) or any other combination will be a value addition to the city. "The outlook for real estate market in Hyderabad is very bright," he said.
"There was a dilemma during last few and this also led to some slowdown in investment. We were earlier thinking that if there is a division and a new capital is formed people may move there causing, disturbance in market for six to 18 months.
"But now there is clarity that second capital is also going to function from Hyderabad and this is going to be value addition for real estate market," he said.
Sekhar Reddy said they expect huge investments but the decisions may take few days. He pointed out that new companies were coming to Hyderabad and existing companies were expanding.
He clarified that prices have not come down and claimed that to the contrary there was price escalation of 20 percent from last year as excess supply of last four to five years was exhausted.
He also denied that there were any distress sales or new projects not coming to the city because of the current situation. He said some people had postponed the decision for a couple of weeks but this is only a temporary phenomenon.
He said the sector's growth in Hyderabad would be determined by the market forces. He hopes with the dollar value going up, there would be more investments by NRIs in the sector in Hyderabad and other parts of Andhra Pradesh. "The prices for NRIs now will be 20 percent cheaper compared to the past," he said.
He said people were still looking to invest in Hyderabad because of the rock-bottom prices compared to cities like Chennai, good infrastructure, availability of manpower, affordable cost of living, cheapest rentals and good climate.
S. Ram Reddy, president, CREDAI, Andhra Pradesh, said the developers' margin remained same despite prices escalation in recent months. According to him the prices were rock-bottom compared to other cities. "If you compare with Chennai, the prices here are one third or half," he said.
The lowest price of residential space in Hyderabad, according to him, is Rs.1,700 per square feet.
