Hyderabad’s real estate market on brink of collapse?

Concept of pre-launch sale of the Undivided Land Share blamed

Hyderabad: Concerns are being raised over the viability and sustainability of the real estate market in Hyderabad. A prediction has also been made that it will collapse by the month of March next year.

The reason behind such a claim is the concept of the pre-launch sale of the Undivided Land Share. In this concept, the builder collects money from tens or hundreds of people for the flats. The money is then used to buy the land from the landlord. The land will be divided among the persons who shared the money and the registration will be made as Undivided Land Share.

The same group of people will make a development agreement with the builder on the promise of flats which will be offered at discounted rates.

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Why will real estate market in Hyderabad crash?

The investors, whose intention is not to live in it, hope to sell it later at the market rate. However, due to the rise in unsold inventory, the model is unlikely to become unsustainable.

Deccan Chronicle quoted Dr Y. Kiron, the chief executive officer of SuchirIndia Group predicting that the real estate market will crash by March 2022.

He said that people are waiting for pre-launch sales instead of buying already constructed flats. It will eventually lead to correction in the real estate market in Hyderabad, he added.

Rise in unsold units

Anarock Property Consultants’ data revealed that the number of unsold units in Hyderabad on June 30 was 50, 580 which has increased to 58, 535 as of September 30.

In three months, around eight thousand units are added to the inventory whereas, 6735 units were sold in the same period.

Former national president of Confederation of Real Estate Developers’ Associations of India (CREDAI) C.Shekar Reddy also blamed the pre-launch sale concept for an increase in unsold inventory.

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