The Coming Bust in the Hyderabad Real Estate Bubble

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The Land prices have gone up several times across Hyderabad city. In many places, they have gone up ten folds in a matter of months. Hyderabad city seems to be the happening place with special zones created for semiconductors, garments, offshore IT and BPO, biotech and anything else that you can think of.

Apartment prices are going through the roof. You cannot get a new apartment for anything less than 60 lakhs – the average size of a two bedroom apartment which was 750 sft about 10 years ago has now become 1500 sft.

There are properties in Hyderabad which are more expensive than similar properties in major cities across USA and UK. If you think it is good, then think – over priced.

So far, the majority of people who have made money from the dramatic increases in pricing have been folks who have flipped properties majorly politicians, local businessmen, real estate companies and local landowners. These speculators buy a property and sell it within few months to the next person. These are the people who have ‘cashed in’ on their investments, so they have harvested their investments. The folks who are holding on to the properties are the employees and NRIs who are hoping their investments will grow in the same way they have done in the past couple of years.

If you imagine that this trend will continue, it is being as realistic as planning to walk across the water from one end of the Hussain Sagar lake to the other end. It is not a question of whether the real estate bubble will bust but when it will bust. And who will be the losers and who will be the winners. It appears that the final losers will be the people holding on to the properties and flats plus the banks that have financed the purchase. By which time, the entrepreneurs who where involved with land speculation and real estate development would have long exited the scene to find the next business opportunity. Like they exited from Aquaculture, floriculture, bulk drugs, IT training and the in numberable industries that they seem to have a knack for coming in and going out of.

That is it for now, more will follow shortly.

You may also like to read:
No Meaningful Correction in Hyderabad Real Estate Prices
Builders Selling Small Number of Super Luxury Apartments are Fringe Players Nationally!
Hyderabad Real Estate Bubble Busts
From Invitation Only to Open Carpets – From Super Luxury to Affordable and Functional Homes
Can Cyberabad Exist Without Hyderabad

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