The proposed mega-project is driving up the property rates in the surrounding areas, says Ramesh Kandula

Real estate is expected to receive a boost with legal decks being cleared for the formation of Greater Hyderabad by the Andhra Pradesh High Court.

It was in July 2006 that the Andhra Pradesh Cabinet had approved the creation of Greater Hyderabad and proposed to invest Rs 800 crore to strengthen the infrastructure.

The judgment has come at a time when the real estate sector in the city was witnessing a slump, considered by many in the industry to be the much-needed correction after prices spiralled in the recent past.

The state government is now all set to create a mammoth metropolitan area of 725 sq km, which is presently restricted to 175 sq km.

This will be achieved by merging 12 surrounding municipalities and 8 villages in the neighbouring Ranga Reddy and Medak districts. After the merger, the population of Greater Hyderabad would increase from the present 35 lakh to above 55 lakh.

The move is expected to have a cascading effect on the real estate industry in the city, as the surrounding municipalities, which have become notorious for woeful and totally inadequate infrastructure, will get the much needed attention from the city planners.

To cite an example, Kukatpalli and Serilingampalli municipalities have witnessed tremendous growth in terms of construction activity because of their close proximity to the IT district of Hyderabad.

However, while the prices of apartments in these areas has touched Rs 3,500 per sq ft, most of them lack even such basic facilities as proper underground drainage system. Most of these areas look decayed with over-flowing drains, potholed roads, pigs, rotting garbage and unhealthy environment.

According to a study by the city-based Administrative Staff College of India, slum population in the Municipal Corporation of Hyderabad limits is only 18 per cent while it was around 61.27 per cent in the surrounding municipalities. Living standard was deteriorating day by day because of this. Population growth in the outskirts was 7 per cent annually whereas it was only 1.9 per cent in MCH limits.

Real estate developers maintain that if the government puts in place effective mechanism to curb unplanned growth in these surrounding areas, then there is scope for healthy boom in the realty sector. Since 550 sq km that is being added has a population of only 20 lakh (against 175 sq km of the city having 35 lakh), the land is vast and thinly populated and offers good scope for planned development, they say.

With better infrastructure, roads, bridges, drainage and sanitation in surrounding villages and municipalities, townships are expected to witness a boom in these areas as people would prefer to stay beyond the crowded city areas. The positive sentiment is already driving land prices up in the areas falling under Greater Hyderabad.
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