End Users Drive the Residential Real Estate in Hyderabad

By: George Gonigal

The real estate speculator is out and the serious end user is in. Hyderabad saw a property boom with plum real estate returns in the last three years giving birth to a lot of speculators in the real estate market.

According to M V Sudarshan of Manjeera Constructions, a Hyderabad based real estate developer," It is true that there were a lot of speculators who were trading in real estate. They would buy a property at say Rs 1200/sq. ft and sell it at Rs 1800/sq. ft. After making a fast buck, they would invest elsewhere. They would invest only up till 20-30 per cent of the total value of the apartment and then exit. These were mere traders in real estate, we can't call them investors and they were definitely there until March this year."

Then what led to their exit, all of a sudden. According to a Hyderabad based property dealer, "From 2004 till 2007, the annual appreciation in residential real estate was in the range of 100-200%. However after March, it has been between 5-25 per cent depending on the area where you invest."

Typically these real estate traders would park only up till a maximum of Rs 5 lacs and would go up till two installments. After an increase in the property values in that project, they would sell this off to a genuine buyer and then park their funds in another new project.

Today, it is the IT professionals who are driving the property market in Hyderabad. They are serious buyers and want to invest in upmarket residential projects. Experts opine that even though supply is a lot in this segment, the demand is also increasing what with IT companies recruiting professionals by the day. The dollar to rupee ratio has not had any negative impact on recruitments, rather the demand is very high for good apartments especially in Hi tech city, Madhapur and Kachiguda.

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