The real estate boom in late 90′s and the following decade (2000) attracted heavy investment in Hyderabad real estate. We have seen the city expanding beyond its boundaries and the barren lands in the outskirts turning into real estate ventures.
Land bank real estate investor’s priorities/lifestyles are different
Real estate investors keep rotating their investments from various cities and states chasing capital appreciation. Unlike regular people, who buy land to construct a house for kids future, educational needs and other purposes, for realty investors, it is an investment option. They use their black money to buy vast stretches of lands in tens and hundreds of acres at low prices. Real estate is a good area to park black money as registered value of land will be only 10-20% of market price.
Then, they wait until the right opportunity comes, sometimes 5-10 or more years. They are seasoned investors and real estate is their full-time business. Whenever they smell some big thing is going to happen in a certain place, they transfer their investments to those places.
Once they have established their land banks, a significant portion of their year goes into monitoring, attending to various notices and issues arising from such lands. As a result they do not have any other business or any business that needs their full energies.
Land prices are skyrocketing in Seemandhra
As far as the information we have till now land prices in Vizag, Guntur, Vijayawada, Ongole, Kurnool, Chittoor, Tirupati and Nellore have already risen. The port cities on which the developers are hopeful are Kakinada and Krishnapatnam. As per industry analysts, there will be a minimum of 40% surge in the real estate in Seemandhra over the next 12 months.
Better opportunities for return exist outside Hyderabad
With the separate Telangana state announcement, Seemandhra becoming a new state, every government office needs to have a new building or campus in the new state. Then it needs a new capital including new Secretariat and Assembly. Even if the Capital shifts after 10 years, the work needs to start in next few years.
This development resulted in price surge in real estate sector of Seemandhra. Expectations are that lakhs of crores of investment will be done in Seemandhra region. Earlier, many people from all districts of AP have invested heavily in Hyderabad. Now they need money – they sell in Hyderabad to encash the boom in Seemandhra.
Big realty investors need to liquidate land quickly from Hyderabad to encash boom in other areas
Realtors are desperate to liquidate land in Hyderabad and move their investments to other areas where they can control the investments by domestic/foreign companies to increase the prices of their land banks. If they don’t liquidate now, not only the prices go up, the prime lands will not be available once other investors buy them off.
Realtors are in a hurry to sell off the lands accumulated over decades and they will be sold in a few months/years. There is over supply and since the rates have increased hundreds of times in the last 10-15 years even if all the billionaires in the world like Bill Gates, Warren Buffet, Michael Dell, Larry Page, etc., come to Hyderabad there will be more land than they can buy. Their bank balance will become zero but there will be more land.
The major real estate players modus operandi and excess land availability situation should now be clearly obvious.