Despite enquiries from prospective buyers and signs of sales picking up, the industry is yet to recover

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Many projects in various stages of completion

Buyers are still in the ‘wait-and-watch’ mode

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HYDERABAD: After almost a year of lull that had the real estate sector deeply worried, there seem to be some signs of construction activity picking up a bit and sale numbers rising slightly.

Though there are more enquiries from prospective buyers and more units sold when compared to last few months, the construction industry is yet to recover from an uncertain situation where it had landed after an unprecedented boom.

Some of the projects have announced positive results and these include Cybercity Builders and Developers which sold the entire Phase-I of its Rainbow Vistas project in just 110 days and also the Water Front project launched by Prajay Engineers.

At the same time, there are scores of small, medium and also huge projects that are in various stages of completion and waiting to find buyers.

Builders do concede that such is the continuing state of confusion that some kept their projects on the drawing board itself and are waiting for the situation to improve while others who took advances from buyers and have not yet started construction, are in a bind.

“Those who have completed say 50 per cent of their projects, have no other option but to sell it fast. Most avail loans from financial institutions and there will be pressure for repayment forcing them to reduce the pricing and sell the units,” says a builder.

Cancellations

Cancellations too have started and builders delaying projects face the prospect of having to return advances.

There is a slight improvement in the situation and sales are marginally up but the trend does not match the hopes of industry, the builder community bemoans. Huge projects, that are yet to find buyers, are coming up in different points along the suburbs, it is said.

Pricing

The pricing did start climbing down but majority of the prospective buyers are still in the ‘wait-and-watch’ mode hoping for the prices to drop further.

In some areas that were most sought after till last year-end, the price tags are 20-25 per cent less now.

“The focus is shifting from ultra luxury to affordability, but the industry in the city is yet to concentrate fully in this direction.

In most cases, the land component came at high cost during the boom and the builders find it hard to balance it.”

As far as construction material cost is concerned, prices of steel and labour have come down.

“There is not much change in cement prices but steel has come down a bit. With less work these days, the demand for labour is not there as it was earlier and hence their charges too are less now,” says C. Prabhakara Rao of Greater Hyderabad Builders Federation.

Political developments

The recent political developments in the State too are cited as one of the reasons for Hyderabad not joining other cities which have started coming out of the slowdown more strongly.

The political scenario that unfolded after the death of Y.S. Rajasekhara Reddy did affect the industry and it might take few more months for the situation to stabilise, adds Mr. Prabhakara Rao.