Hyderabad realty will bounce back much faster than other cities
The real estate market in Hyderabad will bounce back much faster than other cities as positive sentiment still prevails and sales are happening in the city despite Covid-19 pandemic, said Gummi Ram Reddy, president, Telangana chapter, Confederation of Real Estate Developers Association of India (Credai).
Hyderabad: The real estate market in Hyderabad will bounce back much faster than other cities as positive sentiment still prevails and sales are happening in the city despite Covid-19 pandemic, said Gummi Ram Reddy, president, Telangana chapter, Confederation of Real Estate Developers Association of India (Credai).
Speaking to The Hans India, Reddy further stated: "Enquiries improved a lot and sales are happening. However, sales vary from project to project. But I can confidently say that sentiment is not low in Hyderabad though that is not the case with other cities like Mumbai and New Delhi,"
The Credai Telangana president expected a significant bounce-back in sales by around September this year. "As there is no widespread negativity and pessimism in the market, we expect the Hyderabad market to bounce back much faster than other cities," he said.
Redd recalled an interaction he had with a leading housing finance company which offers realty project loans and home loans. "I was told that the financial major had sanctioned six project loans in Hyderabad during Covid-19 period and all of them are fresh loans. It sanctioned the loans without reducing the value of any of the projects, which is very positive sign".
Asked whether prices would fall by 10-20 per cent due to Covid crisis as being speculated now, he ruled out any price correction. "Market has slowed down a bit in Hyderabad and Telangana. That's a fact. But there is no way property prices will go down. In the wake of increase in cement, steel prices and labour expenses, construction cost has gone up by 10 per cent now. So, projects will become unviable if prices are cut at this juncture," he said, adding that, in some cases, builders were paying double wages for workers to continue operations. Reddy has also ruled out any distress sales as inventory levels in the city are less. "Most of the major markets were experiencing slowdown even during pre-Covid days. But the Hyderabad market was doing well. So, inventory has not piled up. Moreover, developers are not under any financial stress and so they are not desperate to sell their stock immediately. Many developers did not opt for loan moratorium announced by the Centre. This clearly shows that real estate companies in Hyderabad are financially strong".
On the labour issue, he said workers started coming back. "For instance, our workers are coming back. One batch is arriving on Saturday and another batch will come on June 15. That means workers are ready to come back. That's another positive sign. I believe 50 per cent of construction workers will return by end of July".
Asked about the commercial real estate, he said the commercial real estate sector was doing extremely well in Hyderabad in pre-Covid days. "With new trends like work from home, this segment might take a hit as companies will not immediately expand their operations in the city," he pointed out. Reddy, who is also CMD of Ark Group, rued that the central government had not extended any support to the real estate sector till now. "The Centre announced Rs 20 lakh crore package, but there is nothing in it for the real estate sector, barring the extension of CLSS"
Real estate bodies are still making efforts to get some support from the Centre. "Recently, we had sent letters to the Centre through MPs and also sent letters directly to the Prime Minister. We are seeking cut in GST, lower interest rates on home loans sanctioned during Covid crisis, debt restructuring of real estate companies and improvement in liquidity position," Reddy stated.
He also pointed out that the central government did not initiate adequate measures to revive the economy. "It is really disappointing. We have very powerful government at the Centre. But it has not done anything to put the economy on growth track. Somehow, it lost the direction".
According to him, India is losing a great opportunity to attract companies from China. "We are the best alternative to China. But the central government is not trying to attract companies which are leaving China. Someone was saying that India approached only three companies out of 19 companies which exited from China recently. All the remaining companies went to Vietnam and Indonesia".