HYDERABAD: Repeatedly hit by political and economic crises over the past few years, Hyderabad’s realty sector could well be in for another round of beating, industry insiders fear. Much like other cities there are going to repercussions here courtesy the chaos over currency notes.
“In Hyderabad, at least 20 to 40 per cent of all real estate payments are made through cash. From buying land and raw material, to selling built-up houses to ‘bribing’ officials for procuring necessary clearances -all these have a significant cash component. Hence, builders across the board have hit the panic button,“ said a senior real estate consultant, adding, “The most concerned of the lot are premium project developers who pump in a lot of cash into their ventures.“
A sizeable segment of builders, which currently is looking to sell inventory, too is equally worried. “In case of apartments, the cash-cheque ratio is usually a poor 10:90, but when it comes to expensive villas priced Rs 1.5 crore upwards -the ratio goes up to 40:60 at times. These transactions will now be badly hit, even if temporarily,“ said a prominent developer on condition of anonymity.
But amidst such concerns of ‘by cheque’ deals too slowing down -with customers expecting a further drop in rates -some within the industry insist that the sector is set for better times ahead. “The development has come as great news for us. Earlier we lost out on a lot of customers because we refused cash payments. Now that that option has been weeded out, we hope our sales will improve,“ said R Suresh Kumar, heading operations of Bengaluru based Prestige Group in the city.
Developers also point out how Hyderabad, unlike Delhi or Mumbai, isn’t driven by investors but end-users. The investor population here is a mere 10 per cent or even less. “Cash dealings happen when a sector is flooded with investors. As that is not the case here, I feel the industry is unlikely to feel any pinch. In fact, it will instil more confidence among genuine home buyers,“ said D S Parsad, director, Aparna Constructions.
Credits ET Realty