Kondapur records highest rental returns in Q3 2013
Investment in residential property at Kondapur, with the objective to obtain good rental returns, is turning out be a lucrative proposition. The area offers the highest rental returns in Hyderabad – about 4.3 % in Q3 2013. Thus, it even crossed Gachibowli which recorded the highest rental returns in the previous quarter.
Interestingly, there has been a consistent rise in rental values in Kondapur since Q1 2013. The rental returns recorded in Q1 2013 was 4% which subsequently rose to 4.32% by the end of Q3. Going by these figures, a property worth Rs.40 lakh that was fetching a monthly rental of Rs.16,000 in Q1 2013 would have fetched a rental of more than 17,000 per month by the end of Q3 2013. The rental values in Q3 alone recorded a rise of 10% compared to the previous quarter.
Property values remain relatively stagnant
Contrary to the appreciation in rental values in Kondapur, capital values in the area remained largely stagnant across 2013. This was mainly due to the political instability in the region due to the Telangana imbroglio. Prices for residential apartments in Kondapur that ranged between Rs.3,200-3,750 in Q1 2013 remained relatively the same at Rs.3,250-3,840 by the end of Q3. Hence, the increase in rental returns can be attributed to both the stagnancy in capital values as well as the rise in rental values.
Demand for property increased
The demand for residential property in Kondapur has been accentuated in recent times because of its proximity to the IT hub of Hitech city. Due to the crash in the realty market of the city, buyers were apprehensive to purchase property during 2013. This was reflected in the fall in sales for residential property in Kondapur as well. However, with political stability set to return to the city following the General elections and the resolution of the Telangana issue, property prices are set to increase in the area.
However, the demand for rental accommodation in the area was still high from IT professionals working in companies in Hitech city and surrounding areas. Moreover, easy connectivity as well as excellent social and physical infrastructure resulted in an increase in demand. As a result, owners who had invested in the area before 2013 were ensured of healthy rental returns. Considering that the prices of residential property are still relatively low at present, it would be a wise decision to invest in property in Kondapur now. It is expected that prices may start rising by Q2 2014. Further, the proposed metro would also have a positive impact on rental values in the area.
