Skyrocketing Real Estate in Hyderabad

Hyderabad has been in news recently. The reason this time was not information technology (IT); rather it was due to the steep increase in the real estate prices in the city of pearls. A city in the southern India which was once famous only for its pearls, biryani, ancient culture and heritage has emerged as the preferred destination for many national and multinational organizations. Hyderabad has accomplished new dimensions and developed as IT hub. There has been a momentum in the overall economic activity in the city. The city today is synonymous with IT sector, Business Process Outsourcing (BPO), Biotechnology etc. Such has been the wave of activities that today the Nizam’s city is the first choice of many national and multinational companies for their operations. All this has contributed to a sudden boom in the real estate in Hyderabad.

The “Real” Boom: The land prices in city have reached an all time high. A new record was set when a six acre land in the very famous Jubilee Hills area of the city was sold at an exorbitant price of Rs.1.18 lakh per square yard, which amounts to a whopping Rs.333.70crore, the highest price ever paid for property in the history of Hyderabad. Such has been the boom in the real estate that not only the central areas of the city but also the suburbs, which were scarcely occupied few years ago, are now thickly populated with construction of a number of apartments and complexes. A city which was alien to the mall culture a decade ago is today home to swanky malls and huge multiplexes.

Reasons for Increase in Prices: As we speak about the metamorphosis of Hyderabad, it’s impossible to ignore the IT industry and the corporate establishments. Technology sector has proved to be a major source of escalating real estate prices. One of the many reasons for increase in the real estate prices in Hyderabad would be contributed to the ever increasing competition from other metros in the country. With more and more companies showing keen interest to launch their operations in and around Hyderabad, it has become extremely necessary to provide good infrastructure. Contributions by the preceding government of Andhra Pradesh under the leadership of the then chief minister Mr. N. Chandrababu Naidu and the present government headed by chief minister Mr. Y. S. Rajashekar Reddy have all worked in favor of the city. The government of A.P has been very encouraging and launched many programs aimed at providing state of art infrastructure. Many local and multinational players are also actively participating to meet the demand.

The City is Expanding: Development started from the northern part of the city i.e. Madhapur with popular technology hub the Hitech City, which is home for many top ranking organizations like Microsoft, Dell and G.E etc. Reaping huge profits many companies then headed towards the southern part of the city and are now spreading westwards. Companies today are equally interested to invest in the areas falling on the Medchal, Warangal and Vijayawada highways. The city is thus expanding and a totally new city is in progress which will boast of excellent infrastructure.

Anticipating brighter prospects in future many companies and organizations are increasingly

investing in real estate. Such is the response that the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) very quickly finished allotment of 113 acre land in the Financial District, a project taken up by the Government of Andhra Pradesh (A.P). To meet the unprecedented demand for land by many more companies, APIIC has sought for an additional 15 acres of land near the Financial District.

Looking Forward: Real estate per se, has gained a lot of momentum in Hyderabad and the future seems to be much brighter. Constructions of the state of art international airport at Shamshabad, Fab city, Hardware Park are few names which have accelerated the growth process in Hyderabad. One of the major projects in the pipeline is the construction of metro rail and outer ring road (ORR). Moving ahead in its pursuit to develop the infrastructure in the city, government has decided to set up the Hyderabad Metropolitan Development Authority (HMDA) which would exercise a higher authorization than the present Hyderabad Urban Development Authority (HUDA). Under this proposition, the government is expected to cover 6,852 sq km, which is three times the present 2197 sq km. HUDA and the Municipal Corporation of Hyderabad (MCH) have already started working on the problem of congested roads. Construction of flyovers and subways has been undertaken to help solve the problem of the ever-increasing traffic. All of which are aimed at clearing the bottlenecks and creating a favorable climate for success. Many companies from United States, Singapore, Malaysia, Japan and Dubai have expressed keen interest to participate in the roads and many other infrastructural developments in Hyderabad. Entrepreneurs are of the opinion that Hyderabad has immense potential for growth. Owing to which, major construction companies have shown keen interest in developing integrated townships with residential and commercial complexes along with entertainment and recreational facilities in Hyderabad. Reputed companies like Madhucon Projects Ltd., DFL Universal Ltd. and IVRCL infrastructure & Projects Ltd. have drafted plans to develop housing-cum-commercial projects which would comprise of deluxe residential apartments, five star hotels, multiplexes and shopping malls. Even the consumers looking for residential flats now increasingly prefer latest and well designed homes in the high-class localities thereby providing huge market opportunities for the construction companies. According to Indiaproperties Hot Cities Survey-2006 by indiaproperties.com, real estate price in Hyderabad is expected to increase by around 10-20% in the year 2006. Survey also reveals that consumers looking for residential accommodation in the famous suburbs may have to pay an additional premium of 10-20%.

Apart from the commercial establishments, many construction companies are also starting residential projects on the outskirts of the city. With increase in the number of working class, disposable income and various offers with easy equated monthly installment (EMI) from banks many consumers are now looking forward to own a flat. As the scenario seems to get better with improvement in the overall economy, the escalating real estate prices do not seem to descend in the near future.