· Tuesday, March 28, 2006 at 4:21 AM CST
I have said many times in the past, you must own a house or an apartment prior to R2I to have smooth transition into Indian lifestyle. It is easier saying than doing it so most of R2Iers won’t have luxury of owing a house or an apartment. For most people, house is your sanctuary so you want to build or buy a house/apartment which suits your budget as well as your lifestyle and will measures upto your taste. Therefore, it is not easy to depend on your relatives to buy a house for you to live. YES you can buy land or property for real-estate investment purpose, to buy a house to live, you must be in India.
Indians typically are good at making compromises; we get married over the phone, just by meeting our life partner only once, exchanging photos via mail and get engaged via video conference etc. – Rest of the world would not imagine any of these methods are acceptable to have a fruitful long-term marriage. Against all odds and marriage counselors (global standards), Indians perhaps have lowest divorce rate among democratic nations. If we can get married on mathematical formulas and able to maintain successful marriages, some people might say – why not house? I can’t argue with them. In my opinion, although most of us can’t lay bricks, we must pour love, thoughts, efforts, imagination, creativity etc. into our house/apartment to be able to call it a “home”. Your house should represent your personality and your way of life, not someone else’s.
We moved to Hyderabad in August, 2005. Very first gated community that I visited was “Hillridge”. I wanted to give a try because it is located in Gachhibowli and reasonably close to Oakridge. Hillridge folks told me that they have 3 or 4 types of houses starting from 1.3 Crores to 1.6 Crores, each house comes with 500 to 600 Sq Yrds plot and about 5,000 SFT house. I took a look at their model house, I told sales person: Why do you guys build such a big concrete structure without leaving much room between houses. Why would any Indian family (IT/Professional background) require more than 3,000 to 3,500 SFT house? Sales person agreed with my assessment and said that these houses were selling for 55 Lakhs about 3 years ago so their planning and building specifications were to meet 55 lakh budget. If you buy 1.3 Crore house, you must add at least another 40 lakh for taxes and interior – way too much for my wallet so I walked out of Hillridge. A good friend of mine told me couple of days that Hillridge folks are asking 2.7 Crore for a similar house that they shown me for 1.6 Crores in Aug 2005 – UNBELIEVABLE!!!
Going rates for Independent houses in gated communities:
500 to 600 Sq Yrd Plot – 5,000 to 6,000 SFT house - 2 to 2.7 Crores (expect to pay 12 to 15 lakh for taxes & registration and 40 to 50 lakhs for interior works): Example: Hillridge, Emaar etc.
400 to 500 Sq Yrd Plot – 4,000 to 5,000 SFT house – 1.8 to 2.5 Crores (expect to pay 10 to 12 lakh for taxes & registration and 30 to 40 lakhs for interior works): Example: Aparna, Jyabheri, Janmabhomi, Lumbini, Bloomfield etc.
250 Sq Yrd to 400 Sq Yrd plot – 3,000 SFT to 4,000 SFT – 70 Lakh to 1.2 Crores
Nizampet Road Area:
250 Sq Yrd to 400 Sq Yrd plot – 3,000 SFT to 4,000 SFT – 80 Lakh to 1.2 Crores
I am not even mentioning about Shamshabad, Srisailam Road, FabCity areas since nobody with common sense (unless someone is ready for daily traffic torture) is going to live in that area within a decade.
Narsingee/Gandipet Areas – 400 to 500 Sq Yrd Plot with 3500 to 4000 SFT house for about 1 Crore to 1.5 Crore.
Going rates for deluxe apartments:
2,800 to 4,200 per SFT in White Fields/Hi-tech city areas
4,000 per SFT in Sri Nagar Colony and Begumpet areas
2,500 to 3,000 per SFT in Bowenpally and other Secunderabad areas
Times of India publishes real-estate rates in various parts of the city every weekend.
My Prediction on Hyderabad Real Estate: I really believe that these skyrocketing real-estate prices have peaked (more than peaked) for now. We will go through a period of consolidation for next couple of years before prices can go up from here. In general, you will always have more buyers at the peak of any industry/sector (example: NASDAQ @ 5,000 attracted several lame investors/day traders than ever before). In the past 6 months, people are paying any price for high quality housing in Hyderabad because they are afraid that they may never be able to afford a house as they were spiking-up on daily basis (Real-estate bubble along with dot-com bubble got busted; BUYERS were reverse bidding on listed houses in Bay area during dot-com bubble; how weird for a buyer to pay more than what seller asked for).
Hyderabad real-estate will take 20% correction over next 12 months. Here are my reasons:
· Telangana is a reality (personally, I think this is the stupidest idea to separate our great state of Telugu people into multiple states but it is a political reality – Congress will do it).
· Earnings/salaries do not support extremely high-cost of real-estate (BLACK money is playing a big role; it will remain be a factor for sustaining high costs).
· Hyderabad along with Bangalore quickly have become less competitive when it comes to atracting highly skilled work force at low cost.
· Lack of infrastructure – it takes years for govt to build proper infrastructure in many of these boondog places.
· Too many real-estate investors/traders in the system – not everyone can make a quick buck, most of us have to work hard and earn money. No easy way to flip a coin and make money, real-estate business has been so good for the past couple of years, any idiot could make money in it – this will change. Just like most investors lost money ultimately in the U.S stock market after NASDAQ crash, these so called real-estate investors/traders will lose their back soon. With Hyderabad real-estate, you use quite a bit of black money when you buy or sell. If you make profit in real estate investments, only way is to invest back into real-estate to hide black money.
· Supply will catch upto demand (lot of gated communities and apartments are in the pipeline)
· I bought a house – I know my luck, typically if I buy something that value/price goes down and it is also true conversely.
Cost of living (particularly housing) in Hyderabad is very similar to Houston, Dallas, Minneapolis, Columbus, Cincinnati and Atlanta. When you add everything (house, two cars, schooling for two kids, utilities, insurance, food, travel, entertainment, charity, health care, retirement savings etc.), cost of living in Hyderabad can be as high as 2 lakhs per month (5,000 USD) which is very similar to cost of living in some of U.S cities that I mentioned. View Post (0) Comments