As we near the close of the financial year, real estate industry in Hyderabad has been swinging like a pendulum. While most realtors observe a positive trend in the residential market, high tax and interest-rates remains a constant worry and puts the Housing for All project in a jeopardy. To provide a better perspective, Sumit Sen, director, Prajay Engineer, speaks to Express about the scenario of the industry in Hyderabad.
As we approach the end of the first quarter, what are the prospects in the residential sector?
There is slight movement in the market. While it is not very significant, there has been a marginal movement and I expect that to continue. Unlike before, the government seems to be more compromising than before. People who have money to spare are looking to invest in areas like Hitech city. All this is ensuring a slow increase in the market.
What are the biggest challenges in the residential sector?
The biggest and most obvious challenges is the service tax and VAT. Now, as a developer I’m buying all the items and paying service tax and VAT wherever applicable. But when I am selling it to the customer, the government is asking us to pay taxes again. So we are in turn charging from the customer. For example, if a customer buys a flat of `30 lakh, he has to play `1.5 lakh extra as service tax and VAT. That is unnecessary and because of this the customers were getting discouraged. Even if developers want to minimise cost for the customers and sell at an affordable rate, we are not able to do that because of so many taxes.
Do you feel people are willing to look beyond central areas and invest in the outskirts of the city?
Yes, yes. That has been our major aim and in fact, we have been propagating that from the very beginning. Our main target is to decentralise the city and let people invest in the surrounding areas. But the problem in Hyderabad is that the customers are apprehensive about moving to the outskirts. They feel that commuting is a major problem.