Hyderabad, Aug 2 (TruthDive) Telangana formation will spur demand for property is the common refrain of late and some rating agencies have predicted this. This contention is hotly contested and seen as a creation of a media.
The ground reality is that the realty took a hit as the prices for flats were costlier than the neighbouring Chennai or Bangalore. The city boasted super luxury flats in the 50 lakh bracket while it had very less affordable housing. Only 15% of the housing units constructed in Chennai and Bangalore had been in Rs 50 lakh bracket. As per estimates, around Rs 70 crore worth units are awaiting buyers. The real estate sector for the past four years in Hyderabad has been stagnant after the Kiran Kumar ministry came to power.
Realty sector is giving out how Telangana is going to increase property prices as both the regions will for next ten years use the city as their capital. With no disruptions, the investors will come back and demand for commercial space is to go up, says Crisil.
Critics point out that no investors moved away from Hyderabad as most of those who run ancillary units that supply to aerospace and defence units are controlled by coastal Andhra bizmen. No major IT firms moved out.
Crisil report says demand would now grow to 8-9%, compared with the present 6-7%. Jones Lang Lasalle report says demand will increase in three months but rentals might not go up as lot of space is available. It has identified areas in the city where demand will be high. The real estate in the areas identified are owned by those who opposed Telangana. The demand for real estate will pick up only after the prices are set to market demand, points out realtors.
By naming a part of Andhra as Telangana why should investors come in droves? Seema Andhra supporters say that in coming months property prices in coastal Andhra will go up and the new State will have to set up a capital and set a base for the industry.
The mineral rich Andhra will see a flight of capital from Telangana, feels industry watchers. The Telangana bill will not come in the oncoming Parliament session, says Shinde. The industry policy and political stability in both regions will only decide the economic growth, say analysts.