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Telangana effect: Buying house in Hyderabad will be more expensive

During 2013 and 2014, residential real estate demand expected to grow at 8-9%

Read more on:    Telangana | Hyderabad | Crisil | Real Estate

The prices in residential segment in are expected to increase with the likely resolution of the issue, according to a report.

Due to the Telangana agitation, residential capital values in Hyderabad had stagnated since 2009 and had driven investors to other cities such as Bengaluru and Chennai. 

“In the immediate term, real estate prices are likely to pick up due to buoyed investor sentiment in anticipation of the city’s return to political and economic stability. In the medium term, the resurgence in corporate investments will improve demand for commercial office space and provide a fillip to job creation and boost residential real estate demand and prices,” said in a report today.

During 2013 and 2014, we expect residential real estate demand to grow annually at 8-9% compared to our earlier estimate of 6-7%. Capital values have already been on the rise in select pockets of the city after bottoming out since the last few quarters on the back of signals that the issue was close to a resolution, the report added.

The gap in residential capital values in Hyderabad will also narrow in comparison to Pune, Bengaluru and Chennai to narrow. However, commercial lease rentals will continue to see only a marginal annual increase in 2013 and 2014 mainly due to a huge oversupply situation.

Yestreday, the government had announced creation of a separate Telangana state and giving the city a special status  for 10 years.

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