When will the wait & watch period end?

HYDERABAD: Rising interest rates and uncertainty due to the separate Telangana agitation have dampened the demand for housing loans in Hyderabad in the past two years. But real estate prices in prime residential areas across the city are likely to witness price appreciation due to an anticipated increase in sales activity over the next three to six months, according to global real estate market research firm Cushman & Wakefield (C&W).“Several residential precincts including Banjara Hills, Jubilee Hills, Begumpet, Somajiguda, Madhapur, Gachibowli and Kukatpally are expected to register a moderate increase in property prices. The appreciation in these markets is likely to be driven by the anticipated increase in sales activity in the next three to six months,” says Ashim Bhanja Chowdhury, regional manager, research services, India, C&W.He added that the overall trend has remained conservative as customers are looking for capital appreciation.“Due to a tighter credit environment, customers prefer to evaluate options and are hence deferring purchases in the short-term,” he explains.A report released by C&W early this month depicted sluggish growth in new projects as only seven new ventures aggregating to 1,000 units were announced in the April-June quarter, much lower than the Jan-March quarter where the number of new projects was in the double digits.“The sluggish growth is due to enforcement of a new regulation, which mandates allocation of 20 per cent of the developed land to economically weaker sections and low income groups, ultimately affecting the overall proposition of the project,” the report said.Meanwhile, a majority of the new projects are located in the eastern parts of the city covering Sainikpuri, Bowenpally, Padmarao Nagar and in peripheral locations such as Gajularamaram and Tellapur. And nearly 40 per cent of these new developments include luxury housing and villas, which shows that there’s a latent demand for premium housing. Although there was an increase in the number of enquiries for residential properties, demand remained latent as property values across most markets remained stable.“To boost sales, developers resort to various promotional strategies such as lowering the booking price and offering additional furniture in units,” Ashim explains. “A few developers demanded higher rates for properties nearing completion in regions such as Kukatpally and Gachibowli.”