LIC Housing Finance Property Show was conducted on Jan 3rd & 4th at Institute of Engineers Khairtabad. This exhibition was a waste of time since the prices were not adjusted to the market conditions. There were hardly any properties on offer in localities where people are looking for homes.
Secondly, with the tightening of the credit norms by banks – it is difficult to get larger loans like earlier. However, real estate companies have hardly any decent property options to offer for the loan amount + savings that most people can arrange. Thus, there is a big imbalance between buyers and sellers.
The good thing was unlike other shows, there was more variety and smaller firms were in good presence. Many of the big companies other than Aliens were conspicious by their absence. There was a good crowd, the parking lot was congested and lot of middle class families visited the show.
There were several developers from Hafizpet and Nizampet area. My contacts in that area tell me that there is hardly 5% booking in that area and builders are under huge strain.
Some developments were quoting Rs.2,500 to Rs.3,200 about 25 kms away from Khairtabad. The prices were off course negotiable. Even if the proposed Hyderabad Metro was operational today as planned – the last stop for these developments would have been tens of kilometers away. In my opinion, these properties are not city locations though they may fall under GHMC limits. It will be very difficult and inconvenient to commute to a job in the city from these developments.
Within the city, one apartment in Srinagar colony was being quoted at 5,000/- per sft negotiable. The size available was about 2600 sft for a flat. At that price the cost of the flat was coming to around 1.3 crore. Based on some rough calculations, this person or family should have a income of Rs.30 lakhs per year and put down some 25 lakhs down payment. You can guess how many can really afford this apartment.
With the builders still quoting exhorbitant rates, only a small number of purchase transactions are possible in Hyderabad real estate market today. Since most real estate companies are looking to get the maximum value from their properties, it appears to me that most of these real estate companies will be exiting this industry and “venturing” into other areas. If someone was really into this business for the long-term they would plan and operate in a different manner.
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