Hyderabad realty will be back on track in 3 months
Prices unlikely to go down as input costs have gone up, says Aparna’s Rakesh Reddy
Hyderabad: With Covid-19 pandemic and its associated lockdown crippling the country's economy, the real estate sector is facing its share of challenges across the country. But will the real estate market in Hyderabad face similar challenges and go through a prolonged slowdown? "No. There will not be any slowdown in the Hyderabad real estate market. It will be back on track within three months," said Chennuru Rakesh Reddy, Director, Aparna Constructions & Estates.
Speaking to The Hans India, he said that despite the Covid-19 crisis, the Hyderabad real estate market has several factors working in its favour. "The advantage for the sector in the city is that it has the lowest inventory among all the metros. So, customers will have to choose from the limited stock available. Further, due to the current situation, it is unlikely that new projects will be launched anytime soon. So, I don't think sales should be a problem for ongoing projects," Reddy pointed out. He further said: "What I feel is that the sector in the city should recover in one more quarter and reach pre-Covid level.
The main problem is not that sales are not happening. In fact, our sales have already reached 60-65 per cent of pre-Covid levels. The main issue is with labour as workers went back. Most of the projects in Hyderabad are at finishing stages when manual labour is needed the most". Most of the workers are from States like Jharkhand and West Bengal. Getting them back is a challenge. But workers are coming back since two days. So, labour situation will stabilise by July second week, Reddy added.
Asked whether there would be any pressure on prices, he said that prices would not come down in the city. "Instead, developers will have to increase prices in the wake of rising input costs such as cement and steel. Labour cost also went by 40 per cent due to shortage. Moreover, prices are very low in Hyderabad compared to other markets. The average price per sft is around Rs 5,000 while the construction cost itself is Rs 2,800 to Rs 3,000 in the city. So, most of the projects will become unviable if there is any fall in prices," he explained.
He said that Aparna Constructions had increased prices in the range of Rs 100 to Rs 300 per sft from June 1 to offset the rise in input cost. "We have eight ongoing projects in Hyderabad. We had over 5,000 people working at our projects before Covid. Only 50 per cent of them are working now," he said. Reddy pointed out about non-availability of local labour. "There is no local labour. So, there is no other option except bring labour from other States," he said.