Thursday, February 08, 2007

Boom to bust to bake

Hindu reports on Hyderabad

While builders blame Government's auctions for the slump in real estate, experts feel it's only a matter of time before it hits the growth curve again

After a free run for almost two years, is the property scene set to take a `U' turn? Have the real estate prices that zoomed up and up begun to crash?

Should one buy now or wait for some more time in anticipation of cheaper prices?

Or is it just that property prices are undergoing the much-awaited correction? In what some describe as a cooling-off period in the city and suburbs which had remained hot for some time, there seems to be a slight dip in land dealings in the last couple of months.

Passing phase

Though various theories are floated and causes attributed for the new trend — some even describe it as a crash — observers look at the lull as a passing phase and a spurt in transactions staging a comeback.

Though some feel tempted to attach the separate Telangana demand as a factor for the slight drop, industry watchers term it an unrelated and temporary phenomenon. Some builders themselves are candid in admitting that the prices have gone beyond the margins of reason and the slowdown will offer some sort of correction.

It is widely acknowledged that the activity has slowed down a bit, particularly on the city suburbs and beyond, where plots and acreages had been sold like hot cakes till November. From Maheshwaram to Nagaram to Shamshabad to Ameenpur, it is said the stream of agents and buyers has come down, much to the consternation of those holding properties there.

Nothing unusual

"It is happening across the country and the phenomenon is not restricted to Hyderabad alone," points out M. Murali Mohan, film actor-turned-real estate developer of Jayabheri Group.

Despite the sharp escalation in the last couple of years, land and apartment prices are reasonable when compared to other metros, he says.

The trading may be down but the real estate scenario is definitely not out.

"There is so much of development activity going on in the real estate field. The boom will pick up soon. Perhaps, after a little correction. I expect that to happen by March," Mr. Murali Mohan says.

The construction activity in the city is need-based and hence will withstand the fluctuations, observes P.S. Reddy, president of the Andhra Pradesh Real Estate Developers' Association.

"Around 15 lakh new jobs are expected to be generated in coming years. Imagine the need and demand for housing that the city is set to witness," he says.

No `T' factor

What about Telangana factor? "The city real estate growth has become oblivious to such issues. IT boys and girls, who constitute almost 40 per cent of our clientele, hardly seem to be perturbed by it," Mr. Reddy points out.

The property prices have indeed gone up. But builders feel the Government, too, should own up responsibility.

"How can it go for the kind of auctions that we had witnessed last year when bids were allowed to hit unscientific levels. At the same time, has the administration done anything to contain the cement and steel prices?" asks a builder.

Mr. Murali Mohan concurs: "The auctions are to be blamed to some extent. The growth should be gradual. It should not lead to situations spiralling out of control."


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