Hyderabad Real Estate: My Perspective

A flat worth of 9.5 Lakhs two years back ,is now costing around 30 Lakhs . A duplex house worth of 25 Lakhs (in Apr 2005) is now costing around 70 Lakhs (don't search for calculator ,it is $150k) . Land worth of Rs.500 per sq yard(2.5 years back) is around Rs 13,000.

Why? Here is my take.

1)When compared to other places in India(Noida, Pune,Banaglore), Real estate rates were very low in Hyderabad before mid 2005.

2)as per new G.O. by Govt .of A.P, Builders have to lease out fist floor to M.C.H. and minimum area to construct aparatment is 550 Sq. yards . Because of this rule, many builders stopped constructing new apratments and the builders who got permission before that G.O. are increasing prices as per their wish

3)Low interestate rates on house loans(7.25 %floating in Apr 2005) and not much hassles in getting the loan.

4)NRIs are spending huge amounts, without really evaluating it's worthness.

Will the boom continue? Is it right to invest now? Here we go...

1)Hyderabad catched up with other places in India(ofcourse ,some places in U.S. also). So, stable on this front

2)There is huge pressure on Govt. to revert back that G.O. If that is done ,we can expect some decrease in prices (atleast some stability on prices)

3)Interest rates increased by 2%(9.25% now) and Banks are not as much interested as they were because of RBI guidelines. .. so kind a stable on this front

4)IT Boom is really good in U.S. and our NRI's are making good money ..This reason drives Real estate boom now. If our NRI's invest intelligently (or stop investing for 5-6 months ),then we can expect some stability on this front as well.

In nutshell, if you invest now, You can expect goods returns on your money (say 15-20%), but if you are expecting 100-200% (like last year), then stay away from real estate.