Branded builders Fueling property bubble in North Hyderabad

Hyderabad: After killing the affordability of residential properties in west Hyderabad, branded builders and developers have stepped into the northern part of the city to continue the same. As there are no restrictions on the prices of private properties, the rates of housing plots are skyrocketing in the North similar to their Western counterparts.

Few realty brands started developing projects in the villages of North Hyderabad and fixed unrealistic prices. This has led the local realtors to hike the rates accordingly to stay relevant in the market. Ultimately, the prices of housing plots lying in the outskirts of the capital city also turned unaffordable and beyond the reach of middle-class buyers.

The real estate market in West Hyderabad is already on the verge of bubble-burst. A middle-class individual can never even dream of having an own house in this area. Thanks to the rising property prices. On an average a 2BHK flat will cost more than Rs one crore here. With the entry of branded developers, now the property market in North Hyderabad is under threat of collapse.

Some reputed real estate firms are inflating the bubble with uneven price growth. The property prices rates will grow gradually over a period of time, roughly some years. But, few developers kept the rates almost double the existing ones. Open plots, which were being sold for Rs 20,000-25,000 per sq yard till recently, are now priced at 35,000-40,000 per sq yard.

Such drastic price hike is seen in the housing plots available at the highway-facing projects in the peripheral areas of North Hyderabad. As per the local sources, the prices of the plots in a branded project are around Rs 40,000 per sq yard while the plots in a well developed gated community layout are being available at Rs 20,000 per sq yard.

J Prakash Rao, a local developer, said: "Premium projects are coming up in villages of Medchal with ridiculous pricing. These developers are over quoting and spoiling the real estate market here. This is not a real growth but inflated growth. The property prices must rise steadily to give sustainable and long term returns. But, these branded players are creating a bubble which may burst any time."

"Every developer must have social responsibility and think about the common man while fixing the property prices. The open plots in the surrounding areas like Athvelly, Kistapur, Pudur and Ravalkole are losing affordability. A middle-class buyer cannot afford even a 200-sq-yard plot here as it costs more than Rs 70 lakh today," he informed.

Till recently, open plots are available at Rs 23,000-25,000 per sq yard in these villages. When the branded developers started offering plots at Rs 37,000-40,000 per sq yard, other realtors also followed the same rates. It will be surprising to know that the plots in these villages were costing around Rs 8,000 per sq yard during the pre-Covid period.

There is no doubt that North Hyderabad is developing at a rapid pace with good connectivity and social infrastructure. Along with Nehru Outer Ring Road (ORR), NH 44 and MMTS, the proposed expansion of the Kompally Highway and metro rail has led to further growth in this area. However, the experts feel that the branded real estate companies are trying to cash in the situation with abnormal pricing.

G V Rao, President of Telangana Developers Association (TDA), said: "Seven years ago, our association has given a plan for comprehensive development of Medchal-Shamirpet satellite city in North Hyderabad. It was ideal for 10 lakh population in 140 sq km area with basic infrastructure like hospitals, schools, university and sports stadium. However, there was no response from the government."

He further said, "If the plan was implemented, it would have helped in de-congesting the city as most of the people coming from adjacent districts may settle in this zone rather than over-crowding the Central and Western parts of the city. Its better late than never. North Hyderabad will soon become what West is now. The property prices in this part will witness exponential growth across categories."