HYDERABAD: Six years after the global recession, the history of Hyderabad realty remains bleak. In fact, in recent times, blinds are down by more than a dozen residential projects in the city, leaving customers in a soup even as roughly 6,000 units are crying for buyers.
While the builders put the blame on "adverse circumstances" - the crisis first and then the sharp bifurcation industry observers tell a different story. According to them, the financial crisis that developers say they are in, is often greatly exaggerated. "If true, how can invest in projects outside Hyderabad?" asked a realtor prominent roots in the city, noting the number of real estate companies, including Janapriya Engineers Syndicate, Keerthi Estates Pvt Ltd, SMR Holdings and Aditya Infra and others have entered the markets of Bangalore, Chennai and Pune YTD.
This, even though some of them holding a large number of unsold properties in Hyderabad. "The reality is that developers can not sell these units because there's really no demand. And that's not much to do with the pricing, as it has to do with his inability to complete any company in the last three or four years, "said sources. The waning reputation has kept buyers at bay, even modest-price houses (anywhere between Rs 2,800 and Rs 3,500 SFT) waiting for buyers.
Indeed, most of the projects that die are those who jumped on the bandwagon of private equity (partnership with private investors) snorting in the city between 2006 and 2008. The concept, then back to Hyderabad was bathed mostly because the developer to support only the initial capital required. Over time, however, the economic crisis, together with a reduction of nearly 50% in the value of land spelled doom for these associations.
"It's important that people understand the nitty-gritty of a proposed private equity before entering into one. In addition, because out of a project like this is very difficult, especially in the prevailing market conditions" said Sandip Patnaik, Managing Director, JLL (Hyderabad). According to him, most developers are now staying put in these endeavors (although not selling) because they would have to undergo a "haircut" 50% (loss) if they decide to leave.
"It is true that some developers tended too, since no provision for such a long period of drought. But despite the odds, who can not now cut prices to clear their stock as the selling price is already at the bottom. In Indeed, if one takes into account the increased cost of construction in recent years, some are even selling at a loss, "argued P Dasharath Reddy, president of the Association of Real Estate Telangana '. He insisted that the number of developers facing a crisis line comprising only "a tiny percentage of the total of 3,500 builders operating in Hyderabad".
While the claim may be debatable, builders agree unanimously that property rates in the city remain stagnant for at least four quarters. "There is no room for any increase in property rates in the short term," said Ashwin Rao Constructions Manbhum reiterating how are "ambitious projects that are in limbo," at present, while the "smaller companies are making considerable way. "
