Hyderabad Real Estate Market
The Hyd real estate market has gone into a wonderful amazing heights. The land price that was 8000 / 9000 per sq.yard (1 sq.yard= 9 sq. meteres) is sold today at 30000 per. sqyd.
kondapur - 30000 Rs/sqyd
Madhapur - 25000 Rs.sqyd
Gachibowli - 15000 Rs/sqyd
Srinagar Colony - 25000 Rs/sqyd
all these prices were nearly 10000 rs/- lesser in the last one year to six months.
Why is the sudden raise in the prices ? who is to blame.
the sudden raise can be attributed to two reasons
a) the sudden raise in the immigration population from other states to Hyderabad
b) Teh infrastructure improvement near these places. - which i will not discuss in this article
Sudden increase in immigration has resulted in need of more houses for the other state folks.
The rent and the price of the land goes hand-in-hand.
As the demand for the house increase, the houses become more dearer and the folks are willing to pay a premium to stay in those houses. The normal formula for rent calculation is 4% - 6% of the property value is considered as a good - best rent for the land lords.
so lets say a property worth 20 lakhs is given out for rent at 4% the rent is 8K, while for the same property there are 8 people who are fighting out, and the 2nd one is ready to pay 3% more than the 1st person and 3rd person is ready to pay 3% more than the 2nd person.
So by cumulative analysis and the demand-supply equilibrium the rent is now 9900/=
that is
1st person is ready for 8000
2nd person is ready to pay 8240 (8000 * 1.03)
3rd person = 8487
and 8 th person is ready to pay 9900/=
if the rent is 9900 what is the property value now
it was 20 Lakhs @ 8K rent and at 9.9K rent the property value is 24.5 Lakhs which means a 1000 sq.ft property @ 2000 Rs/sft is now 2450 rs/sft.
so the land prices are appreciating in an geometric fashion , which is causing this churn of prices.
so a mere 4% (40 paise per 100 Rs/-) leads to an artificial inflation of 450 rs/- sqft which in turn increases the land price and the rent in a cyclic manner.
