Realty in AP after the dollar slump

HYDERABAD: Real estate prices have slumped drastically in the last few months and industry analysts point to the changing rupee-dollar parity and stablilisation of salaries in the private sector as the culprits.

“Property market in Hyderabad is no more for locals. We see several international players investing in the city’s real estate. All this is for the future. For, now, there is a slump," builders forum president C Shekhar Reddy told ‘TOI’.

Reddy attributes the slump to the dollar’s continuous fall against the rupee (with it slipping to below Rs 40 for the first time in a decade) and the plateauing of high-end salaries in the private sector. As a result, realtors are wooing buyers with ads like"Open plots for Rs 3,999 a sq yard. Available on monthly instalments," and"Book a plot today and win a two-night, three-day stay in Singapore".

Areas in the outskirts like Maheshwaram, Tukkuguda and Shamshabad, which have been witnessing an unprecedented boom in the last year with the price for an acre touching as much as Rs 1.5 crore, are now in the grip of desperate transactions."Now, there are no takers for as much as Rs 20 lakh an acre in these areas. It is those real estate traders that are getting into a desperate act now. Landlords are not worried since there can never be a depreciation in the price. Even if there is a slump, it’ll catch up again. Holding onto land is like investing in a blue chip company in the stock market," Shekhar Reddy said.

According to experts, the real estate market has now gone beyond the reach of the middle classes. The villas and plots for independent houses on the outskirts have gone beyond the affordability of the salaried class and what is for sale now are for the high-end buyers in the form of gated communities and luxury apartments."As the marketing gurus speak, the market has gone beyond the masses — the middle class — making it fit only for the high-income groups. As this is not a volume game, the prices have seen a natural correction," head of a housing finance company said.

However, according to bankers, the slump in the last six months is more a cyclical factor than a trend in the market."The first half of a calendar year is normally a dull period for the property market. Going by the previous years’ trend, the second half will be more active with people preferring to buy property during the festival season. Though the future course will be known only after the two festivals in October and November, for now, the prices have reached a plateau," regional head of a housing finance company said.

In the housing sector, builders do not see any scope for an upside in the mid-market segment. Houses sold Rs 2,000-2,500 a sft are categorised as mid-market properties."The mid market products may not see any upside in the medium term. But, the luxury properties being sold at over Rs 4,000 sft and luxury independent houses being sold for over Rs 2 crore a house are witnessing some continuous increase," Mahender, Indu Projects’ head of marketing and sales, said.