Hyderabad Real Estate Update

A lot of you have sent emails asking for a newer update on hyderabad real estate. I have tried to be as truthful as possible below.. so dont call me a nay-sayer again..

Apartments : STAGNANT .. NO MOVEMENT.. DEAD is the update on apartments that are priced at Rs 3500 and higher. Builders think that we will still fall for the good old techniques of "I only have a few left.."... Insiders are indicating that builders are now pulling the planned projects since they are unable to gain any interest at Rs 3500 and higher. Recently I heard of Rs 4000, Rs 3750 in L&T and a new a launch at Rs 4500 got a very cold reception.IT junta realized that builders are skimming them out of their hard earned money. It will be a while before this correction ends since a lot of supply is coming into the market now.

Villas : The hype has now shifted to villas. This is the next area where I think people will get burned. Every one and their brother is starting a villa project, since they do not see any demand in apartments. Things you hear today in the market are .. :"We need villas for most people who work in the hitec area etc.. There are not enough villas around to meet the demand etc..".. How the heck will a person earning 50K as a median salary afford a Villa ?. Forget the installments at 11%, the person will not even have enough to pay for maintenance. There is no question that demand will go up for the next 18 months as the villa projects have just started and all investors will think that this demand will sustain. Think about what will happen when they are all ready to be delivered and occupied ?

Plots : Bubble has busted in the dead-areas of the City. Other areas have corrected pretty badly. People still cannot believe that land prices are lower than they bought for. If your realtor friend tells you that your plot acquired in the last 6 months is going for double the price, its time to call his/her bluff and ask for the money. Overall its a good time to pick up land.. I heard recent transactions in Banjara and Jubilee residential areas happening in the 35K to 45K range.. Forget the commercial areas, they are hot hot hot.

Some recent updates..

1. One large township in the city is undersold, and people who booked and got their apartments are not able to resell it since they are competing with the actual developer who has more than 30% of the inventory left.

2. Whitefields [ my favourite concrete jungle ;-)] has a # of apartments that are not rented since the owners are expecting that they will really make the Rs 30K / month based on the hype that builders created. I know of one person that got his 3 bed apartment done with all the latest in fittings etc., expecting to get 30k, and is unable to rent it even for Rs 18k. Best offer he got was 15k.

3. Interest rates now stand at 14% on fixed and 11% on Floating. One bank manager who deals with loans indicated that all their business has stopped in the past 1 month and they are only dealing with the backlog that they had from earlier months.

As always.. do your own research.. dont get carried away by my commentary or for that matter any ones input.. Its your money, spend it wisely !!!!..