A recent survey revealed that among the top 7 cities of the country, Hyderabad had the lowest real estate prices. Despite being a city which offers good employment opportunities, real estate in the city has been down mainly for the uncertainty surrounding the state’s future. However, now that there has been a division and Hyderabad has been made a part of Telengana, the city is set to gain whatever it lost in the real estate in Hyderabad uncertainty.
The city is mainly for end users as houses and cost of living is quite affordable in the city still. This is also a reason why real estate prices are lower in Hyderabad. A recently constructed Housing Sentiment Index has shown that almost 57 percent people who earn less than Rs 10 lakhs look to live in Hyderabad. It also proves that Hyderabad is the place for people in the middle to upper middle income group. Not only is the capital value low in Hyderabad, but also the rental value. For 2BHK units in central areas of Hyderabad, the rental rates are as low as Rs 10,000 to Rs 12,000. For similar properties in Mumbai, you would have to pay around Rs 50,000 to Rs 60,000 while in Delhi, Bangalore and Chennai the amount may be around Rs 30000.
However, when it comes to real estate in Hyderabad, should you rent or buy in the city? Kondapur is one of the most popular areas of Hyderabad where flats are available for Rs 35 lakhs to Rs 40 lakhs whereas the rental value of such properties is around Rs 10,000. If you have a monthly income of Rs 50,000 and have to pay a 20 percent down payment while the rest can be borrowed from the bank for twenty years, it would be best to buy property rather than rent it. For a flat which costs around Rs 40 lakhs, a 20 percent down payment is around Rs 8 lakhs. Therefore, if you save long enough, you would be able to pay this down payment. Saving money in Hyderabad is easy because expenses are low. However, the pressure of paying EMI at 11 percent interest rate may be more on you. If you are thinking of booking a flat in an under construction building, then paying EMI and rent may be a bit too much for you. You can always opt for properties that do not require you to pay all the money before possession. Many builders are bringing in innovative schemes so that buyers do not reel under the pressure of EMI payment.
When you compare the prices, it may seem that renting is more convenient but buying would allow you capital gain which depends much on where your house is based. Therefore, it would be better for you to buy a flat or house instead of invest the money in rent.
Recently, the government of Andhra Pradesh has decided to cap land acquisition at 5000 acres to keep in line with the 2013 Land Acquisition Act. The CM of Andhra Pradesh has approved the rule of fixing the cap on August 23. Once the rule is passed, corporate or individual buyers cannot buy more than 5000 acres of land, even if there is a livelihood loss and displacement of people. The government had earlier considered fixing the limit at 10,000 acres but then changed its mind to avoid displacement of a larger number of people. The government may also rule that private parties would have to acquire land by themselves and then enter into PPP models of development with the government. The compensation offered to land owners of rural areas has been fixed at 1.25 times what the value of the land is at the market. In some scheduled areas, the market value will be limited to 1.5 times. The percentage of cultivated land that may be acquired has been fixed at 10 percent. A lot of officials feel that this is not a very fair move because most of the land available in Andhra Pradesh is under cultivation. However, the ten percent rule is applicable for all the land available in the state and not for a particular district. A draft notification and new rules are being drafted according to the orders of the CM which shall be discussed in the next cabinet meeting. The latest Act specifies that notification of the decision should be well publicised for gathering public reaction.
A lot of people are now concerned about investing in Hyderabad because on the Telenganafront too, land acquisition is becoming a problem. The Sivaramakhrishnan committee has ruled that land acquisition in West Godavari, Krishna and Guntur should be avoided although it has to be seen whether the state government approves of it or not. A lot of people are also speculating that the CM of Telengana may not be able to influence PM NarendraModi for granting funds for the city of Hyderabad and hence land acquisition costs would have to be cut down.
Builders feel that Hyderabad has to be a city using which the state would be able to attract investments globally. Therefore, to make an impactful capital city, land acquisition is a must. However, there is a doubt about the capital’s location which is why not many people want to invest right now. There are talks of situating government bodies like the assembly building, CMO and Secretariat in areas such as Pulichintala, Amarabati, Nuzvid and Musunuru. Because of the uncertainty surrounding Hyderabad’s position in the new state, market prices of real estate in Hyderabad have not fluctuated. The Sivaramakrishnan committee’s suggestion of not making a super city and instead make do with smaller capital has enraged TDP leaders because they feel a large city is important for attracting investment to the newly formed state.
Therefore, Hyderabad’s real estate prices are still quite affordable and once an official announcement is made, the prices would shoot through the roof. Even if Hyderabad is not converted into a super city or city of global standards, real estate would continue to be in demand in the city because of the existing infrastructure.
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| Real Estate in Hyderabad |
However, when it comes to real estate in Hyderabad, should you rent or buy in the city? Kondapur is one of the most popular areas of Hyderabad where flats are available for Rs 35 lakhs to Rs 40 lakhs whereas the rental value of such properties is around Rs 10,000. If you have a monthly income of Rs 50,000 and have to pay a 20 percent down payment while the rest can be borrowed from the bank for twenty years, it would be best to buy property rather than rent it. For a flat which costs around Rs 40 lakhs, a 20 percent down payment is around Rs 8 lakhs. Therefore, if you save long enough, you would be able to pay this down payment. Saving money in Hyderabad is easy because expenses are low. However, the pressure of paying EMI at 11 percent interest rate may be more on you. If you are thinking of booking a flat in an under construction building, then paying EMI and rent may be a bit too much for you. You can always opt for properties that do not require you to pay all the money before possession. Many builders are bringing in innovative schemes so that buyers do not reel under the pressure of EMI payment.
When you compare the prices, it may seem that renting is more convenient but buying would allow you capital gain which depends much on where your house is based. Therefore, it would be better for you to buy a flat or house instead of invest the money in rent.
Recently, the government of Andhra Pradesh has decided to cap land acquisition at 5000 acres to keep in line with the 2013 Land Acquisition Act. The CM of Andhra Pradesh has approved the rule of fixing the cap on August 23. Once the rule is passed, corporate or individual buyers cannot buy more than 5000 acres of land, even if there is a livelihood loss and displacement of people. The government had earlier considered fixing the limit at 10,000 acres but then changed its mind to avoid displacement of a larger number of people. The government may also rule that private parties would have to acquire land by themselves and then enter into PPP models of development with the government. The compensation offered to land owners of rural areas has been fixed at 1.25 times what the value of the land is at the market. In some scheduled areas, the market value will be limited to 1.5 times. The percentage of cultivated land that may be acquired has been fixed at 10 percent. A lot of officials feel that this is not a very fair move because most of the land available in Andhra Pradesh is under cultivation. However, the ten percent rule is applicable for all the land available in the state and not for a particular district. A draft notification and new rules are being drafted according to the orders of the CM which shall be discussed in the next cabinet meeting. The latest Act specifies that notification of the decision should be well publicised for gathering public reaction.
A lot of people are now concerned about investing in Hyderabad because on the Telenganafront too, land acquisition is becoming a problem. The Sivaramakhrishnan committee has ruled that land acquisition in West Godavari, Krishna and Guntur should be avoided although it has to be seen whether the state government approves of it or not. A lot of people are also speculating that the CM of Telengana may not be able to influence PM NarendraModi for granting funds for the city of Hyderabad and hence land acquisition costs would have to be cut down.
Builders feel that Hyderabad has to be a city using which the state would be able to attract investments globally. Therefore, to make an impactful capital city, land acquisition is a must. However, there is a doubt about the capital’s location which is why not many people want to invest right now. There are talks of situating government bodies like the assembly building, CMO and Secretariat in areas such as Pulichintala, Amarabati, Nuzvid and Musunuru. Because of the uncertainty surrounding Hyderabad’s position in the new state, market prices of real estate in Hyderabad have not fluctuated. The Sivaramakrishnan committee’s suggestion of not making a super city and instead make do with smaller capital has enraged TDP leaders because they feel a large city is important for attracting investment to the newly formed state.
Therefore, Hyderabad’s real estate prices are still quite affordable and once an official announcement is made, the prices would shoot through the roof. Even if Hyderabad is not converted into a super city or city of global standards, real estate would continue to be in demand in the city because of the existing infrastructure.
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