The Hyderabad property market experienced record levels of growth during the past three years, however, everything has finally slowed down and the market appears to be cooling off. After some areas increased by upwards of 300%, growth rates are at their recent all time low and signs of stagnation are clearly present. Although individual purchasers were deterred by higher interest rates, the fact that rental prices increased by about 50% didn’t help either. Coupled with input costs sharply rising and rules becoming stricter, all of this has led to a slowdown in construction activity.
Nevertheless, even in the face of such negative news, the property market shows promising growth as firms with substantial backing gear up for considerably large projects such as gated communities and townships. Similarly, projects like the Rajiv Gandhi International Airport which is being developed near the twin cities of Shamshabad and Hyderabad, is forecasted to trigger more property growth.
Chief Executive Officer of Suchir India real estate developers Mr. Y. Kiron told Business Line, "Despite the hiccups in the short term there is going to be a time for the development and construction segments." Mr. Kiron also expressed an expectation that there would be an increased demand for gated communities, townships, villas, and other niche products. He added, "At RS 3,500-4,000 per square feet, a comfortable flat would cost about Rs 90 lakh, excluding taxes and budget for extra fittings. This could prompt people to go in a villa, which gives them the feeling of owning a home."
One of the largest challenges is being able to provide an environment where new projects of a certain size can find the support, specifically high-rise buildings. "Do we have enough number of skilled plumbers, masons, electricians?" asked Mr. Kiron. He further added, "While interest rates on housing loans have eased a bit, large builders from Hyderabad and across India are launching mega projects. However, prices are not likely to go up significantly as supply is more."
