Credai study to take stock of Realty Demand-Supply position in Hyderabad
With a change in the realty environment due to the announcement of Telangana, a study is being undertaken by the Andhra chapter of the Confederation of Real Estate Developers’ Associations of India (Credai). The objective of the study would be to take stock of the demand-supply proportion that is currently prevailant in Hyderabad. According to the president of Credai, realty demand will be accessed as part of the study. Besides, it will delve into the status of different projects that are yet to be completed like ongoing, pending and stalled projects and ascertain their proposed date of completion. Based on this analysis, a correlation can be drawn on the prices that these projects demand.
In view of the current developments taking place in Hyderabad, this study assumes immense importance. The agitations that have been taking place in Hyderabad since 2009 by pro and anti-Telangana activists has resulted in a prolonged slump in the realty sector. However, the decision with regards to Telangana is set to change the market dynamics of the sector in Hyderabad. With a view of comprehending the market dynamics, the study will enable to provide insights into the changes in the market, pricing patterns and the stock available.
The Andhra Pradesh chapter of Credai has invited expression of interest from consultants like Ernst & Young, Jones Lang Lasalle, Cushman & Wakefield and CBRE to take part in the study. The consultant once chosen, will be provided access to various agencies like Greater Hyderabad Municipal Corporation (GHMC), Hyderabad Metropolitan Development Authority (HMDA), local administration in the neighbourhood of Hyderabad, different government departments like stamps and registration departments etc, so that it will get a feel of the ground realities that exist in the region.
Varying perceptions are surrounding the demand-supply scenario that is persisting in Hyderabad at the moment. But they cannot be taken at face value since the ground realities are different from these perceptions. Contrary to what is generally believed, the supply is less than the demand. However, speculative buying which was responsible for the burgeoning price hikes in the realty sector, and which was rampant before the realty crash in 2007-08, is missing. This has resulted in a mis-perception among the public, especially those who would like to invest in property.
Sale of flats was comparatively much higher than open plots especially due to the presence of many IT companies in Hyderabad and their employees preferring to purchase a flat for the benefits it offers when compared to a plot. As a result, it has adversely effected the transactions of stamps and registration offices in many districts of Andhra Pradesh. Even though the realty sector is in a Catch 22 situation at the moment due to a combination of causes, it is bound to progress in the near future.
Contrary to popular belief that the supply of residential units in Hyderabad was more than the demand, in reality, it was the reverse where demand was more than supply. Moreover, speculative buying which was rampant about five years ago and which resulted in prices rising disproportionately when compared to supply, is no longer existent. As a result, the current prices are more closely linked to demand than before.
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