In Hyderabad

Its been a while since I wrote about my favourite bearish past time.. Real Estate.. Guilty as charged.. I only take bearish views on real estate ..  If you dont like it and want to believe that everything is hunky-dory, go to the other 100+ sites that will massage your ego

Airport Opened : Finally, Shamshabad GHIAL finally opened its doors and now what ?..  I expect teething pains to continue for one more month.. [ I couldnt believe that  KLM  did not know about the new aiport and decided not to land at shamshabad and flew to delhi and then to mumbai with all the passengers on board ;-)].. but we are a long way away from getting any connectivity to this multi billion dollar facility.  Takes minimum of 1.5 hour to get there by a cab that costs Rs 700, or 3 hours by shuttle service that costs Rs 100.. Soon, bangaloreans may have a better highway to Hyderabad airport than we do. 

In the airport area, some companies including the well known players are trying to re-create the hype about living near the airport.. I never got what the hype about the airport was and will never get it..  If you are holding a plot and see a rally in this area, I recommend that  you sell in every rally.. 

Ring Road Phase 1 Continues to be crawl.. I have not seen any progress at the Nanakramguda Under/Over pass in the last 18 months.. Unless they are trying to work backwards from the airport, I dont see any progress at all.. Everytime the CM convenes a meeting on the status of these roads, we see a few more trucks of dirt being dumped to create the exit ramps etc.,

Now the real estate bubble…. Is it really a bubble ?.. some insiders are saying that it has already started letting some air out.. Call a realtor and ask him if you can sell your apartment or plot immediately..  I keep hearing excuse after excuse.. I pick a few guys from DC classifieds and call them just to see how well they are improvising..  things are slow sir its dushhera.. sir, you know no one buys around diwali.. year end is here we dont see things getting better before pongal.. and the latest one was that things will get better from April 1st.. [ He claimed that people dont get into transactions in march .. not sure if that is even true ;-) ].. Next it will be the local elections.. and then the statewide elections..

Guess what ? in the last 9 months, your investments have most likely lost around 10 - 40% of their peak values depending on the area you are invested in.  This is my guestimate.. I know of real world cases where  owners are unable to get even 70% of the peak value that their sites were hyped up to be..

The proof that realty space is softening is visible in the valuation of the landbanks of the big real estate companies.  Agree that inflation is moving up and RBI may not cut rates which will create some negative sentiment for the realty companies …. but nothing will justify the falls they have seen in the last 2 months..  Ansal, Parsvnath, Omaxe and Unitech who have recently created news by acquiring land in Hyderabad at high prices have seen their stock prices drop anywhere between 60 - 75%..  If you are gung-ho about land and real estate, it may be the best time to invest in DLF or other major players who have seen their stock prices correct by 50% in the last 2 months.

So, Is the bubble ready to burst ?.. Or has it already burst ?.. Only time will tell..

PS  : All opinions are mine and mine only..  As always.. dont get too carried away by my analysis or by the other guys who are hyping up 6000/sqft apartment prices..  Its your money, invest it wisely !!!