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Negative Impact Of The Surge In Realty Market


Negative Impact Of The Surge In Realty Market

Last updated: April 25 2007
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  • Negative Impact Of The Surge In Realty Market

    Hyderabad : When a two-acre land, close to the upcoming international airport at Shamshabad near here, was offered to a US-based software engineer Kasoji H Rao in 2001 for Rs 12 lakh, he was reluctant to buy it as he thought that the price was too high.

    Three years later, he rued not buying the land as it was sold at Rs 90 lakh per acre. Call it a surge in the economy, IT and BPO boom, launching of metro rail project, elevated expressway, new international airport or the Outer Ring Road project, land prices shot up abnormally in the city and outskirts between 2004 and 2006.For instance, areas in and around the Hi-tec city, the IT hub, witnessed a four-fold rise in two years, shooting up from around Rs 5,000 per square yard to Rs 20,000 per sq yard.

    Prices of apartments too are now virtually out of the reach of the middle class with builders quoting Rs 4,000 per square feet as against Rs 2,000 per sq ft a couple of years ago. That means a decent two-bedroom apartment within the city will not be available for less than Rs 50 lakh.The tremors were felt when Telangana Rashtra Samithi (TRS), which is pressing for separation of the state, walked out of UPA Government in August 2006.

    The ‘bubble' finally burst and the prices started falling, though mainly on the outskirts in areas surrounding the airport, after TRS chief K Chandrasekhar Rao quit the Lok Sabha and retained the Karimnagar Lok Sabha seat in a by election in December 2006. Since then, a lull has set in putting a big question on the future of real estate in and around Hyderabad.“The decibel levels of Telangana slogan always pushed the land prices, either up or down, upsetting the plans of all those involved in the business,” a real estate dealer told this website's newspaper.

    However, he is optimistic that the prices will pick up again and realtors will be back in the business. It is not only the realty in trouble but even the police officials are worried as the boom and recession in the real estate are posing law and order problems arising out of scores of land disputes.

    Cyberabad Police Commissioner S Prabhakar Reddy says: “Increasing profit margins in real estate resulted in crooks entering the business resulting in scuffles, which sometimes led to murders,” he said.In fact, the Hyderabad and Cyberabad commissionerates receive dozens of complaints every month relating to shady land deals but they cannot take action on them as the disputes are civil in nature.
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