Hyderabad: Turnaround in Real Estate market expected in 2014

The year 2013 was one which saw the Hyderabad realty market face one of its most turbulent years. With the year coming to a close, industry experts look forward with hope to see a reversal in fortunes in 2014. The previous two years saw the city embroiled in multiple issues like political instability, economic slowdown which adversely affected the realty sector.

Infrastructure developments to enhance realty appeal:

The year 2014 is expected to bring about a renewed vigour in the realty market of Hyderabad. With the General Elections round the corner, it is felt that there will be an upsurge in sales especially for residential property in the city. Besides, there are various infrastructural developments that are in different phases of progress that could have a positive impact on realty. They include the infrastructure developments in the vicinity of the Green Fields International Airport, the development of the 158-km long Outer Ring Road (ORR) as well as the metro rail project.

Telangana formation unlikely to have negative impact:

The announcement of the formation of Telangana is not expected to have a negative impact of the realty market of Hyderabad. This is due to the fact that Hyderabad is likely to be the capital of Telangana in the long term. Thereby, the existing infrastructure of the city will most likely be retained. Irrespective of the current political situation prevailing in the region, many MNC’s have gone ahead with enhancing their operations in Hyderabad. This goes to show that the faith that investors have with regards the future prospects of the city.

Political instability primarily caused slump in market:

The infrastructure of the city has grown tremendously along the years, which has resulted in it being a favourable investment destination. However, the political instability prevailing in the state was one of the major reasons for the city to lose its appeal among investors, thereby resulting in a slump in market. However, with the political imbroglio expected to be resolved soon, investors are waiting with bated breath for a turnaround in investment climate.

Surplus Supply and unsold investors feature of 2013:

One of the major peculiarities seen in 2013 was the mis-match seen between demand and supply, especially in the sales of residential property. Will surplus supply and unsold inventories being a feature of the year, there was a slump in prices to facilitate the sales of unsold units. This resulted in the city turning into a buyers/end-users market, with most of the buyers delaying their purchases, waiting for prices to drop further. To off load unsold inventory, investors were forced to sell their projects at lesser prices, thereby affecting their margins.

New launches reduced in 2013:

Due to the surplus of unsold inventory, investors were also forced to put on hold their future projects that were planned earlier. As a result, the number of new project launches were reduced drastically.  However, there was no dearth of demand in the western part of the city, consisting of the IT hubs. Gachibowli was one such area which saw the maximum project launches in 2013. Many areas in its vicinity were also in demand. Some of the favourable factors for this persistent demand is its proximity to the IT hubs. Besides, its closeness to the ORR as well as the International airport also were contributing factors for the rise in demand. Kukatpally is another area in the vicinity that witnessed a steady demand for residential property.

2014 expected to ring in change in realty fortunes:

The impending General Elections in 2014 is expected to being about a change in fortunes in the real estate scenario of the city. Moreover, the political uncertainty surrounding the formation of Telangana is also expected to be resolved by then. Subsequently, there is expected to be a upsurge in real estate activity around the city, with investors expected to cash in on the bounty, due to spiraling prices. Hence, from a buyer’s perspective, this is the opportune time to make hay while the prices are affordable.