In several residential projects in notable areas like Gachibowli, Hitech City, Kondapur and Manikonda, builders are quoting Rs 6000/Rs 7000 per square foot. Representative picture
Amid the pandemic, while residential property prices have fallen in many places across the country, Hyderabad has seen the opposite. Not only has the cost of purchasing apartments in many areas of the city risen, but sales have also skyrocketed. According to Anarock research, the city has seen approximate sales. 6,735 units in Q3 2021, which is 300% more than Q3 2020.
In the past five years, the average property price per square foot has increased by just 6.8%, from 3,968 rupees to 4,240 rupees per square foot, according to Anarock research. However, in some of the city’s major smaller markets, notably West Hyderabad, the average apartment price is as high as 5,600 rupees per square foot.
In several residential projects in notable areas like Gachibowli, Hitech City, Kondapur and Manikonda, builders are quoting Rs 6000/Rs 7000 per square foot. So much so that when you buy a tiny 1,000 square foot apartment, you could end up spending as much as Rs 70 lakh or more on all costs, including registration stamp fees and GST. It is also difficult to find this size of apartment in a large and reputable project where the focus is now on building spacious apartments. But the cost of these apartments can exceed Rs 1 crore.
Interestingly, to provide a cheaper alternative to homebuyers, a lot of detached buildings are being constructed in the city. Many of these buildings are not registered under RERA but have HMDA (Hyderabad Municipal Development Authority) approval. This leaves a lot of doubt in the minds of buyers as to whether they should overlook RERA registration while going for cheaper apartments? Will they face difficulties in the future if they buy homes in non-RERA projects?
Experts say projects that fall under RERA can be a safe bet for buyers due to the safety net that the law provides.
According to Santosh Kumar, Vice Chairman of Anarok Group, all the projects proposed for development have an area of more than 500 square metres. of land or have more than eight apartments that have been authorized to register under RERA in their jurisdiction. Hence, even in Hyderabad, any project of this size and above must also be registered under RERA. Only projects smaller than these can be sold without RERA registration.
“Ideally, projects that fall under RERA are a safe bet for buyers as it provides some sort of safety net for them in case the developer fails to stick to schedule, build quality, etc.,” Kumar told FE Online.
Are all non-RERA projects bad for you?
Projects registered with RERA are a better bet in the case of a property under construction as the law protects the buyers’ interest in the event of any default.
However, if someone purchases a ready-to-move-in property, there are many other factors to consider. These include the builder’s reputation, project completion, HMDA delivery certificates, location, build quality etc. Without certificates of completion and delivery, it would be difficult for the buyer to register the property in his/her name.
“One should do due diligence before purchasing any property and definitely see the builder’s credentials and previous record. One should not be attracted to low prices only because it may prove later on that they are expensive,” Kumar said.
Also, it cannot be said with certainty that all projects that are not RERA approved will be a bad bet for homebuyers.
From a legal perspective, HMDA approvals provide the convenience of basic building and planning permissions. RERA registration (if applicable) adds that additional protection to extending protection for buyers, including resolving any disputes, as well as placing more responsibility on builders, according to Rakesh Warrier, partner, JSA said.
While purchasing a new residential property, the reputation of the builder must also be considered.
“Reputation of the builders and their position in the market will also be a major consideration. Therefore, it may not just be a question of choosing one over the other. The assessment should be made taking into account all factors. The general guidance from real estate bodies (such as CREDAI, TREDA, etc.) has been that buyers should look at RERA approved properties,” Warrier told FE Online.
Nitish Sharma, Consultant at AnantLaw, said HMDA was set up for the purpose of planning, coordinating, supervising, promoting and securing the planned development of the Hyderabad metropolitan area. On the other hand, the Real Estate (Regulation and Development) Act 2016 (RERA Act) includes, among its many regulations, a provision to establish a nationwide Real Estate Regulatory Authority (“RERA”). The founding objective of this body is to monitor the real estate sector and settle disputes related to real estate projects.
“HMDA approved properties must operate in harmony with the provisions under RERA, as RERA is the supreme authority regulating HMDA. RERA comes into operation when there is any default with respect to the provisions. However, the buyer must implement compliance Flour before disbursing his hard-earned money before reserving a commercial/residential unit,” Sharma said.
Is it the right time to buy a new home?
According to Kumar, for buyers who are sincerely looking to buy homes, this is the time to buy. Many developers offer deals and discounts while home loan rates are also at an all time low.
“However, amid the current rising inflationary trends of raw materials like steel, cement, labor cost etc., sooner or later will force developers to increase property prices,” Kumar said.
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