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Hyderabadis Are Waking Up To Expensive Housing
Posted by Pradeep Sadanapalli | July 18, 2008 | 2,337 views
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Hyderabad is waking up to expensive housing and how. Villas priced anywhere between Rs 2 and Rs 12 crore are coming up in the city and, hold your breath, selling too.
Builders say this is only the beginning of a housing revolution in the city with people with the moolah dreaming to own these independent houses with luxuriant interiors, a big lawn and a bigger price tag. Checks out the reality of this new realty trend.
Pricey Property
“Is it going to be diamond studded,” asked Archana, a prospective property buyer, a trifle stunned when a builder pegged the price of a “basic’ ‘ villa at Rs 2.5 crore “only’ ‘ at a property expo.
But unlike her, there were a sizeable some who decided to make fast bookings of what they considered a modestly priced house. Indeed, Hyderabadis are waking up to expensive housing and affording it too.
With prevailing villa rates starting with Rs 2 crore and the city gearing up for ventures offering each house at a minimum of Rs 12 crore, confident builders say these houses will sell well.
Property as Investment
At a time when land has become a premium commodity and demand is exceeding the available acreage, people are willing to buy property at any cost, say industry observers.
Predictably, they discount the salaried class when counting their potential customers. They point out that mass housing itself is becoming expensive with each flat spread in about 1,000 sft costing about Rs 30 lakh, villas or gated communities are unthinkable for the salaried class. For, the price of a typical bungalow in a gated community project would be equal to 30 years’ salary (at the rate of Rs 50,000 per month) of a middle-level manager in a private company.
The Luxury Lifestyle
Going by the projects that are coming up near Hyderabad, each villa or a house in a gated project would cost upwards of Rs 2 crore.
So, villas or gated projects are not for the common man since they are all real “dream houses” .
And dreaming the real big house dreams are just about 10 per cent of the city’s population with the moolah to breathe in mint fresh air as they sip their mint tea on the thick carpeted lawns of their under construction villas.
Soaring Demand
Initially when some big property developers and builders came up with the idea of constructing and selling houses worth Rs 2 crore each, many Hyderabadis predicted they would never sell. Two years hence, the demand and supply scenario for such houses has completely changed.
“Villas or luxury bungalows do not come up in great numbers. May be some 1,000 such buildings are being sold now near the city. But, there are buyers,” says Ravishankar, head of a housing finance major. Industry persons note that the city with a population of over 70 lakh would at least have one lakh people in the rich category who can afford these villas.
Upcoming Projects
For now, most of the expensive houses are coming up on the city outskirts. Medchal, Gachibowli , Shamshabad, Shamirpet, Bombay Highway and Tellapur are some of the locations at about 30 kms distance from the city that are witnessing brisk activity in terms of luxury villas construction.
According to industry observers, about 15 projects of Rs 2-crore villas have already been approved by the authorities and are at an advanced stage of construction. Each project would have 70 to 300 houses. All the projects put together , about 2,000 houses costing Rs 2 crore to Rs 2.5 crore would be fully ready for occupation over the next two years. Another 4,000 villas are still on the drawing board and will come up in the next three to four years.
What’s In It?
Like Archana, many would wonder what makes a villa so expensive. After all, it’s the same raw material - cement, steel, brick, sand and other inputs - that are used for building any house.
“There are many differences. First of all, quality of the material itself makes these houses that much expensive and of course the cost of the land,” SuchirIndia’s Y Kiron says.
Villas coming up in the city are on average spread over a minimum area of 300 sq yards and have a built-up space of over 4,000 sft. In addition , it is in a gated community providing complete privacy and security. There are other features like swimming pools, club houses, lawns and space to park three to four cars.
Besides, the main hall, drawing room, kitchen and bed rooms are all aesthetically designed and the interiors done tastefully, the wall paints matched to perfection and the electric and sanitary fittings drool-worthy.
Added Features
“There is definitely value for money in villas . Though the cost scares a common buyer, those buying it will know why a villa is expensive ,” Kiran says.
The gated projects come with additional features like gas pipelines, solar heaters, power back-up systems like generators, street monitoring system and 24X7 security. Most of the gated projects are now coming up in areas where the land cost is about Rs 20,000 per sq yard. This itself is about Rs 60 lakh of the total cost. According to builders, while a typical middle class house can be built with a cost of Rs 850 to 1,000 per sq ft, cost of construction of a villa would be about Rs 3,000 per sft. For a 4,000 sft villa, the construction cost itself would be about Rs 1.2 crore.
Who’s Buying?
Going by the bookings and enquiries at some of the projects, most of the buyers are NRIs, politicians and local businessmen.
Among the salaried class, pilots and senior managers of a couple of IT companies are found to be prospective owners of the villas.
“It’s not paying much for the NRIs to save money abroad. They do not get more than 3 to 4 per cent return. But, the property value appreciation particularly on the city outskirts is many times more than that. Others are able to raise loans from housing finance companies,” Kiron says.
Ownership and Investment
But, not all those booking these villas are prospective owners. There are speculators and punters too. “For many booking a villa by paying some advance is an investment proposition. All those who have booked these houses may not end up occupying them,” V Srinivas, an architect associated with one of the gated projects, says. As the project comes up, the land value around the project tends to appreciate and that makes the project itself more valuable. The investor then sells it off to a real buyer at a premium .
“About 40 per cent of those booking these villas are actual buyers and rest of them are investors . There are people who are taking loans to buy these houses. But, they are all real highnetworth individuals either with high salaries or good business track record,” Ravishankar says.
New Trend
Luxury housing seems to be the new trend that’s setting into the city’s property market. While Rs 2 crore to Rs 2.5 crore houses seem to be really expensive now, industry analysts say that the current price would be the rock bottom price in the next couple of years. Funded by foreign financial institutions, many property companies with their headquarters in Dubai, Singapore and Malaysia are now taking up some exotic projects on the city outskirts.
For instance, a Dubai based infrastructure major is coming up with a gated project with each house costing upwards of Rs 12 crore. “It’s difficult to prove today that we would be able to sell these houses . But, we are pretty sure that the project was taken up only after a proper evaluation of the demand and affordability and there are buyers willing to lap up the houses irrespective of the price,” an official associated with the project said.
The Other Side
Unlike an apartment, most of the gated projects are located away from the city. While they are all assured of proper security, the maintenance of the complex itself makes the difference . “Maintenance is the only downside in the entire story. For instance, if there is a break down either in the water supply or power supply and there is no proper back up, every one in the complex would regret buying a house,” Kiron says.
Since the project is on the outskirts and the occupants too are from a different strata of the society, there would be no room for any maintenance disruption. “First of all they do not expect a break down to happen. Even if it happens, they expect it to be rectified within no time. So, if the builder is not reputed, he would not provide any after-sale support to the occupants. That’s a great risk involved in the gated projects ,” Srinivas says.
The Pricey Green
While owning a house in one of these hills - either Banjara Hills or Jubilee Hills - is considered to be a status symbol, the rich and the famous seem to be in search of new icons to show off their status. Gated communities do offer a status symbol to many. However, builders are in search of new methods to satisfy the needs of the rich buyers, of course at a price. For instance, ‘green’ is one way of making one feel ‘great’ .
“All those projects coming up in the midst of green cover have a good number of buyers. Green cover means more cost since the developer will have to earmark a part of the available land for plantation,” M Ram Mohan Rao, a builder, said.
Infrastructure Counts
While lawns are a part of a villa project, even high-rises with a green cover around are going at a premium. While apartments in the concrete lanes are being sold for Rs 2,000 to Rs 2,500 per sft, those on the outskirts with green cover around are being sold for about Rs 4,500 per sft.
However, going by the trend, preference is now for projects on the outskirts even if it is an apartment. “Irrespective of how much a buyer a spends on buying a house in the city, there is no infrastructure support. Rain water drains, proper connectivity, parking space and place for children to play are some specific issues that are being raised by every buyer. It’s not practical to expect all these features in an apartment located in the city. So, the only option is to move to outskirts and that’s what is happening,” SuchirIndia’s Y Kiron says.
Author: K V Ramana
SOURCES:
Economic Times
Topics: Real Estate |
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