The market remains tight but the large developers are holding-on to price levels. Under normal circumstances, a low demand should have resulted in overall price correction, of significant nature. However no appreciable correction is seen.
In fact, new projects like PBEL at APPA and Sunway Properties at Borampet are quoting unbelievable rates at these locations. 1.0 Factors influencing price. There are several factors in the market which makes price to remain high. This include overall inflation, rising raw material costs (Especially Cement & Steel)and shortage of labor force.
The high inflation should automatically make a rate of Rs. 3000/sft to increase to 3300/sft in a year (10% rise) but developers who commit price of Rs.3000/sft has to hold it, whatever be the inflation and increase in cement /steel prices. This situation exposes projects to under recovery risk and obviously, to mitigate this, developers are forced to quote price, with LARGER Margins.
In addition to this, the Govt. has been increasing approval fees, drastically and all increases have to be borne by Developer once price is committed. (Refer Article on GO288)The above factors have made it impractical for developers to offer considerable reduction in price.
Aparna Nallagadla - Base rate of 3500/sft + Extras
Aliens Tellapur - Base rate of 3500/sft + Extras
SMR (Miyapur) - Base rate of 3200/sft + Extras
SMR (Guchibowli) -- Base rate of 5500/sft + Extras
Sunway Properties, beside Borampet - Incredible 3600/sft with 400 Rs/sft special discount at Borampet in 2008 July? Hope sense will prevail. Wonder weathere any Hyderbadi got wooed by Malaysian girls whi manned the sales desk! We are sure people here are smart enough, to see through he scheme of things. (The price is unusally high considering the location. Definitely this Company is not passing on low land acquisition rate, to buyers instead, its asking for extremely high premium even if quality is outstanding)
PBEL, at APPA - Rs.3500/sft at APPA in 2008 with Express Highway still in early stage of NON-COMPLETION?! Wonder whether people would run and buy, at APPA at 3500/sft while apartments are available at lower prices near Narsingi, Tellapur, Nallagdla and even all around Kondapur, Nanakramguda etc The price is a bit unusual considering the location and status of Express Highway. Buyers may review quality/amenities, density (flats per acre) etc and reach own conclusion.
Maytas at Hill County -Rs.3400/sft. So over-confident earlier, now even Maytas is forced to particpate in Property Shows to try and get odd bookings.
Giridhari Constructions at APPA - Rs.3200/sft is asking price. This is said to be negotiable down to 2800/sft
Aditya Tellapur - Villas -Above 225 Lakhs There were several smaller firms all quoting Rs.3000/sft and above, even in Kukatpalli, Chanda Nagar and beyond. Indu was around with its project near Nagole. The new "kid" on the block, BHARAT was not at Exhibition. But they are quoting 3600 to 5600/sft opposite to Guchibowli University! Its going to be an uphill task for it too.
Source:
http://www.exclventures.com/News-July08-property-expo.asp
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