The Ressex sales index shows no movement in the fourth quarter compared to the third quarter in the last fiscal. Especially, Hyderabad continues to underperform in terms of sales.
The real-estate industry in Hyderabad is replicating the same scenario of lacklustre sales as of the Mumbai market during the fourth quarter ended in March 2010. The most astonishing fact is there is no movement in Ressex (Real-Estate Sensitivity Index) sales index in Q4FY09-10 compared to Q3FY09-10.
Ressex data released by Liases Foras (a real-estate research firm) shows that the sales index has remained flat at 11 during the Q4FY10 compared with the previous quarter. Earlier, Moneylife had reported that developers in Hyderabad were offering huge discounts to sell off their ready possession properties (during Q2FY09-10) due to fall in demand. But now the condition has worsened.
Simultaneously, the price index has also remained unchanged between the third quarter (ended September 2009) and the fourth quarter (ended March 2010) of the last fiscal, leading to lower sales.
The prices of properties have to come down in the Hyderabad market in a order to push up sales. According to sources, the Telangana issue is also keeping buyers away from purchasing new properties. Currently, property prices in the city vary between Rs3,000 per sq ft to Rs5,000 per sq ft.
During the quarter ending September2009 of the last fiscal, total sales of two bedroom, hall and kitchen (2BHK) properties in Hyderabad fell sharply. Places like Secunderabad, Nizampet and Manikonda are hot locations for residential properties and developers from these locations were offering discounts of up to Rs8 lakh-Rs9 lakh.
"Property prices have to come down to push up sales in this city. Developers are constantly launching new projects in the range of Rs3,000 and Rs5,000 per sq ft," said Pankaj Kapoor, founder, Liases Foras, a real-estate research firm.
According to the Ressex data, the business turnover index fell significantly in the fourth quarter of the previous fiscal from the third quarter. The business turnover index fell to 164 in the fourth quarter from 177 in the third quarter.
Developers are launching many high-priced properties in Hyderabad. However this has led to higher inventories during the fourth quarter compared with previous quarter. These properties will witness very low absorption till the time corrections do not take place in the market, said an expert.