Impact of Hyderabad’s real estate slowdown on property registrations in Telangana
How much longer will delays in construction permits continue?
Is there a stagnation in Hyderabad’s real estate sector? Are all the major realtors in Greater Hyderabad confused? Are construction professionals in Hyderabad expressing concern? The answer seems to be yes. The Telangana government has not announced a clear policy regarding Hyderabad’s development, particularly in the real estate sector. As a result, the real estate industry is in turmoil due to uncertainty about the stance of the Revanth Reddy government on construction matters. Additionally, the HYDRA effect is causing further disruptions, leading to setbacks for Hyderabad’s construction industry. These developments are affecting home sales in Hyderabad, causing builders to express their frustration.
It has been nearly nine months since the government changed in Telangana. The BRS party, which had been in power for nine and a half years, lost, and the Congress party has taken over the government. Typically, when a local government changes in the real estate market, there is a natural pause, and the market eventually gets back on track after some time. It is normal for there to be a review of old policies and formulation of new ones by past governments. However, even after nine months of the Congress government taking charge in Telangana, the Revanth Reddy government has not made any policy decisions regarding the real estate sector.
As soon as Chief Minister Revanth Reddy came into power, he announced the cancellation of the Metro Rail project from Raidurgam to Shamshabad Airport, which was initiated by the previous BRS government. Consequently, the construction sector in West Hyderabad, which had been booming at jet speed, has slowed down. Furthermore, the Telangana government also announced the suspension of the Pharma City project, leading to a sudden drop in the real estate sector. However, with the subsequent announcement of a new city being constructed in that area, some of the losses were mitigated, and the real estate sector somewhat recovered. Nevertheless, it is undeniable that the Hyderabad real estate sector is still grappling with uncertainty.
Real estate experts believe that the Telangana government’s stance is the reason for the turmoil in Hyderabad’s construction sector. Even though Revanth’s government has been in office for nine months, they have yet to hold a single meeting with builders. They have not sought the opinions of builders regarding the development of Hyderabad. Moreover, the Revanth Reddy government has not yet announced any policies related to the real estate sector. As a result, builders are somewhat worried about how the new Telangana government’s stance towards the construction sector will unfold. Accordingly, new construction projects in Hyderabad have decreased, and home sales have also dropped.
Although the previous BRS government revoked the 111 GO, it did not provide clarity on the policies. Now, the Congress government that has come into power has not yet announced its stance on this issue. The Hyderabad real estate sector is waiting for clarity on aspects such as zoning allocations and construction permits under the scope of the 111 GO. Not only builders but also ordinary citizens affected by the 111 GO are keenly awaiting the Telangana government’s decision. Meanwhile, while there is positivity regarding the development of the real estate sector in the Hyderabad market, builders are somewhat dissatisfied with the delays in granting approvals for new projects.
To understand the current situation, it is noted that the Revanth government did not make any decisions on permits for a while after coming into power. Although government officials claim that permits are being issued, builders argue that this is just a formality. Builders are urging the new government to take responsibility for removing the uncertainty regarding permits. However, discussions among builders indicate that there has been no positive response from the Telangana government. Additionally, the impact of the Hydra effect on real estate in Hyderabad is also evident. Due to the Hydra effect, land transactions in the state have decreased.
Registrations in August have declined compared to July, with the revenue department revealing a reduction of around Rs 320 crore. Specifically, in the GHMC limits, Hyderabad, Rangareddy, Medchal–Malkajgiri, and Sangareddy districts had 58,000 registrations in July, but only 41,200 in August, according to officials. Revenue in July was Rs 1,100 crore, while in August it fell to Rs 785 crore. This indicates a revenue drop of Rs 320 crore from July to August. Real estate experts believe that this data reflects the Telangana government’s stance and the impact of the HYDRA effect on the real estate sector. They suggest that if the Revanth Reddy government announces a clear policy on the construction sector, it could help stabilise the real estate market.
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