Date:06/12/2008 URL: http://www.thehindu.com/2008/12/06/stories/2008120655860600.htm

Andhra Pradesh - Hyderabad

Real estate hits a new low at HMDA auctions

Staff Reporter

The business is a victim of global meltdown, say officials

Only three out of 83 properties find bidders
Rs.7.6 crores earned of the expected Rs.100 crores

HYDERABAD: Portents were clear but if one waited to accept the realities of real estate in the city, the recent auction called by Hyderabad Metropolitan Development Authority (HMDA) proved it.

A total of 83 properties in different locations in the city and suburbs were put for auction by the HMDA but unlike earlier times when such initiatives drew hotly contended bidding, only three properties could find bids. Incidentally, the plots were put for auction earlier also but failed in spurring any interest among investors.

The plots on auction included those in once sought after locations such as Nalagandla, Nandagiri Hills, Ramachandrapuram, Miyapur and Madhapur. The HMDA which hoped to raise up to Rs.100 crores through the auction is now left with 80 plots and a very small fraction of the expected amount coming its way. Given the scenario, the authority might not put the left over plots for yet another auction immediately.

“It is the global situation and we are no exception. When property prices in the U.S. can spiral down, Hyderabad cannot be an exception,” reasoned an official. Earlier, it was the software professionals with high salaries who led the way in pushing the prices. “Now there is a sense of insecurity among them and which other salaried segment can be expected to pay Rs.15, 000 or more per sq. yard,” he argues.

Ironically, even the three plots at Vanasthalipuram, Madhapur and Asifnagar that found bidders did leave the authorities disappointed with the response. A mere 0.9 per cent more than the price fixed is what ultimately happened to be the bid, a stark contrast to auction results that in the boom time sent the prizes into a tizzy.

With around Rs.7.6 crores coming in place of hoped Rs.100 crores, officials concede that a fresh bid to put the ‘remaining plots for yet another auction immediately were remote’.