HYDERABAD: Despite a slowdown in property registrations and buyers not coming forward to invest in real estate due to unaffordability, developers continue to jack up the prices of apartments.
Earlier, middle-class buyers used to purchase 2 BHK flats. However, with the change in lifestyle, most of them are preferring 3 BHK flats, which cost more than Rs one crore even on the outskirts. Even for 2 BHKs, builders are quoting Rs 70 lakh. There are only a few flats available for Rs 50 lakh–Rs 60 lakh, but they are very far away from city limits.
As per the data by Knight Frank, a total of 15,355 properties were registered during H1 2023 (Jan–June) with a total value of Rs 16,712 crore.
When compared with the previous half year H2 2023 (July–Dec), the property registrations were 16,353. When both half-years were compared, 1,000 registrations have come down.
For the past one and a half years, a large number of flats have been lying vacant owing to high prices along with the increase in bank loan interest rates.
Interestingly, Hyderabad has nearly one lakh unsold inventory, which is the second highest in the country, as per a PropEquity report.
Moreover, the city has an inventory overhang of 16 months, which is the highest in the country. A few months ago, the inventory overhang was around 24 months.
Artificial realty boom being created: Builder
The realtors attributed the increase in unsold inventory to the rising cost of construction and land rates. This has put a big burden on buyers. On the other hand, launches have been more in Hyderabad which is also one of the reasons for the high unsold inventory.
Meanwhile, a few realtors are saying that an artificial realty boom is being created in the city by quoting high prices in land auctions. For instance in the surroundings of Budvel, both land and flat rates are set to rise by 20 per cent or even higher in areas like Kismatpur, Bandlaguda, Narsingi, and Peerancheru. In these areas already land is costing over Rs 1 lakh per sq. yard. A couple of years ago, the land prices in these areas were Rs 50,000 per sq. yard.
N Praveen, president of Telangana Realtors Association, said that real estate has come down in the last year as rising prices have become a big burden for buyers.
“The high land prices being quoted in auction is only a gimmick to increase the real estate in nearby localities as many developers are having many acres of land in surrounding areas,” he said.