Rents firm up in Hyderabad bl-premium-article-image

V. Rishi Kumar Updated - March 12, 2018 at 02:38 PM.

People are confused on whether to stay on rent or spend the rent money as EMI to buy a home.

Lower rents and shorter commutes have made uptown properties attractive.

The rental values of both residential and commercial properties in Hyderabad have gone up by 10 to 20 per cent in the last quarter.

This varies depending upon the location. In some areas, the hike is steeper going up by about 20 per cent and in others it is about 10 per cent, according to Mr D. Sreedhar Reddy, President of National Association of Realtors India.

Interaction with a cross section of real estate players and recent reports of consultancy firms show that the rentals are firming up just as the capital values. The firming up of prices reflects the market mood which has turned positive after a few quarters of subdued sentiment against the backdrop of a slowdown and agitation for statehood for Telangana.

Property consultant Makaan.com has come up with a report that states it's better to rent a property rather than buying one in cities like Mumbai, Delhi and Ahmedabad. But that's not the case for Hyderabad where properties are cheaper.

Basing its assessment on rapid urbanisation and a recovering market, the report observes that the inhabitants are confused on whether to stay on rent or spend the rent money as EMI to buy a home.

There is a general feeling that at times staying on rent is economical. However, an individual is drawn by the sentiments of owning a home. High property prices, increasing home loan rates leading to high monthly instalment and innumerable projects, though, leave him puzzled.

In the absence of any robust tool to arrive at any decision, people go by their gut feeling, or with the guidance of a close relative, a friend or an experienced acquaintance.

Ideal for buying

Hyderabad throws up an interesting pattern for Makaan.com. Compared with other metros, buying a property is cheaper here, according to the portal. . The report states that Hyderabad has become buyer-friendly. The recommendation is mainly based on lower price appreciation compared with rental appreciation.

Cushman & Wakefield in its latest report and advisory states that rents have gone up from 9 per cent to 25 per cent. Select locations in Hyderabad, such as A.S. Rao Nagar and Punjagutta, have witnessed incremental growth of 20 per cent over the previous quarter. Rents in A.S. Rao Nagar have grown the highest at 26.7 per cent.

Persistent leasing enquiries and scarcity of suitable space have pushed rents up 9-20 per cent across the city's prime high streets and mall locations. Retail demand for space has been high on account of consumer demand and affordable rents as compared with other cities.

Mr Reddy said that the demand showed mixed patterns depending upon the location. In the areas in and around the IT hub of Hyderabad, there is increasing demand for gated properties as opposed to standalone properties. The rents are higher by between 15 and 20 per cent in gated-community projects.

The rents for a three-bedroom property of 1,500 sq. ft to 3,000 sq. ft range from Rs 15,000 to Rs 45,000 a month. This is generally more when it comes to gated-community ventures.

Referring to commercial property leasing, Mr Reddy said that the rates, which came down in 2008, have seen gradual increase in the past few quarters. The rise was sustained during the last year and there are signs of further firming up.

In IT parks and special economic zones, rents have gone up from Rs 30 a sq. ft to Rs 37-38 a sq. ft. For city commercial properties, while demand is good for lower floors, there continues to be mixed response depending upon the location and convenience of use.

Indiaproperties.com, real estate portal, in a study highlighted how there is increasing preference for properties which are smaller, say, 1,000 sq. ft, versus 1,500 sq. ft earlier. This is mainly because it drastically reduces the cost of the project and also payout for rentals.

Higher rents in the core city area has raised concern among some. Travelling to office and business hubs such as Hitec City is a problem. Therefore, people are preferring properties in the peripheral areas of the city that are well-connected. This has two positives: lower rents and a shorter commute.

In the core city area, closer to schools and hospitals, rents remain high. But people faced with traffic snarls are looking at other options.

Consultancy firm Jones Lang LaSalle in its report on rent for May on Hyderabad has stated that the residential demand remained moderate and the rents stable during March, and a few projects that are at final stages of completion continued to increase prices. The supply crunch in Hitec City and Gachibowli has begun to push up rents and capital value.

There is demand from retailers but not enough supply.

vrishi@thehindu.co.in

Published on May 12, 2012 15:36