Amicable solution to Statehood issue will spur realty growth, say sector players

V. Rishi Kumar

Hyderabad, Dec. 30

Real estate segment players are looking at the year ahead with a sense of optimism and feel that the ongoing issues relating to Telangana State creation and the submission of the report by the Srikrishna Commission will settle down in an amicable manner.

They believe that the Telangana factor has already been factored by the industry and the prospective buyers. However, they maintain that the sector should see some speculative buying which is necessary to create more excitement and the Andhra Pradesh Government should extend some of the sops it had announced earlier.

Mr K. Ravinder Reddy, Chairman and Managing Director of Janapriya Engineers Syndicate Ltd and Chairman of AP Builders Association, told Business Line that the recent Supreme Court judgment in the Babri issue was a pointer as to how a workable solution was provided where all the stakeholders took the order in their stride.

“I personally expect that the Srikrishna Committee will do something similar so that everyone gains,” he said.

Mr Reddy said, “We have a reason to be optimistic as the sector has already reached its lows in terms of pricing and buyer interest. From here on, it could only get better. Once peace and tranquillity is ensured, the real estate business will get better from the current situation. Genuine buyers, who have been postponing their decisions, will start buying the right fit and create the buzz in the market again.”

Looking for changes

Mr Prem Kumar, President of AP Real Estate Developers Association (APREDA) and Managing Director of Doyen Constructions, said “while it may not be appropriate to predict the outcome of the findings of the Srikrishna panel and its fallout, since it has already been debated extensively. The fact is there has been a lot of uncertainty, not only in the sector but in the State and due to change in political leadership.”

“In the last few months the sales have picked up and all those people in need of homes are deciding to buy. But there are many others who are keen to buy but have been postponing hoping some more changes. Either way, once the issue settles down, we will see sales going up. However, he felt that some of the sops that the Government offered to apartments below 1,200 sq.ft and other rebates in the firm of stamp duty need to be extended. These lapse in December,” Mr Kumar said.

“As a representative of the real estate builders' body, we have articulated these issues and hope that the Government would take a favourable decision. That will not only enthuse buyers, but also accelerate registrations and, thereby, add to the State's revenues,” he said.

Mr Anand Reddy, Managing Director of PEBL Constructions, said that the real estate has presented different patterns in the last three years. From a high in 2007 end and early 2008, and the lows seen in all of 2009, it has gradually picked up in 2010.

It continues to be stable now. Surely those genuinely requiring properties will take a plunge next year enthused by attractive rates builders are offering.

Citing their own projects, Mr Anand Reddy said “there have been 15 per cent conversion of visitors in the last four months. We hope this will go up as people will no longer consider postponing as they have realised that the property rates are at their lows. If at all this could only go up as things settle down.”

(Source:- http://www.thehindubusinessline.com/2010/12/31/stories/2010123151541700.htm)