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Real Estate Rates Double In 3 Years
Posted by Pradeep Sadanapalli | May 23, 2008 | 649 views
(9 votes, average: 4.67 out of 5)
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Property prices in twin cities have more than doubled in the last three years. Builders and the government are blaming each other for this, but both have no solutions to offer.
A 1,000 square foot luxury flat was available for Rs 15 lakh in 2005, but it now costs Rs 30 lakh in the city outskirts. Similarly, the square foot rate was around Rs 2,500 in major residential areas such as Jubilee Hills and Banjara Hills three years ago. This too has gone up sharply.
In areas such as Kukatpally, Dilsukhnagar and Marredpally too, rates have gone up from Rs 1,000 per sq ft to more than Rs 2,500 now.
Rise in prices of steel, cement, sand and other building material has played a role in this. Builders are also artificially jacking up prices in certain areas.
Steel used for construction was available for Rs 25,000 per tonne three years ago. Now it costs around Rs 45,000 per tonne.
The price remains generally high even after the Union government had taken series of steps, forcing steel companies to reduce it a wee bit. The same is the case with cement. A bag of 50 kg was available for Rs 140 in 2005 but the rate is around Rs 230 per bag at present.
Likewise, a truckload of sand that cost around Rs 2,500 in Hyderabad three years ago is available now only for Rs 10,000.
“The surging land prices have also played a role in increasing the rates of flats in twin cities,” said Mr A. Patnaik, manager, marketing and sales of Telugu Properties.com. “Most of the land buyers jack up the prices in order to get huge returns within a short span of time.”
He added that actual construction would stabilise the prices of flats while frequent transactions of plots would lead to escalation of prices. Each builder has to invest at least Rs 1 crore for the purchase of 1,000 square yards, which is mandatory for building an apartment complex. Otherwise, the Greater Hyderabad Municipal Corporation will not approve of the building plans.
The Greater Hyderabad Builders’ Federation blamed the government for imposing such stringent rules on them. It also pointed out that the government collected development and land conversion charges and also imposed value added tax on builders. It is estimated that Rs 400 per sq. ft is being paid as taxes.
“It is the government, which is responsible for the steep hike in property prices in Hyderabad,” said Mr C. Prabhakara Rao, president of the federation.
“There are few takers for flats because of the increase in rates. The government has to examine the problems of the construction industry or buyers will continue to suffer.”
SOURCES:
Deccan Chronicle
Topics: Real Estate |
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