The great expectations, post resolution of all political / economic issues, were that Hyderabad's residential market would just skyrocket. The market had taken a serious beating over the past few years. With things becoming normal again it was expected that the market would gain back lost ground in the short / medium term and prices would mirror any other metro prices. I had also read some pronouncements predicting an immediate 50% hike in prices.

What seems to be happening currently is exact contrary to these expectations. Many builders / developers / brokers are now forced to rethink as to why residential customers seem to be still holding back taking decisions. It is also important to understand this trend and explore what is going wrong or needs to be improved before this lull becomes an existential issue.

Over the past 6-7 years, Hyderabad's residential real estate market was first affected by the economic recession of 2008. It was expected that post recession the market would be back on track but then the political turmoil erupted in end 2009. It was generally expected that post bifurcation normalcy would be established and markets would grow, which has not happened as yet. May be it is a little early to judge, but if we are to hope for better times ahead then we should be atleast seeing some green shoots now of recovery.

We were always made to believe that the main issue with the city's residential market was the impending bifurcation of the state. Clarity on this matter came by 2013 mid and implementation happened some 6 months back. As time is passing by, the residential market seems gripped by a stalemate situation.

What seems to confuse matters further is that Grade-A commercial office market in Hyderabad seems to have picked up. Normally such positive momentum on the commercial side helps in pushing / pulling the residential market also towards the positive side. So what is going wrong and what is the customer telling the developers / builders / brokers / government?

Around 2008-09 one of the issues which was beginning to take root was 'trust deficit' between buyers and developers / builders / brokers. Due to more pressing issues like bifurcation & recession, the trust deficit issue was put on the back burner. On the contrary, lack of adequate sales and resultant lack of progress in many projects has widened this trust deficit to alarming levels today. Today's stalemate seems to be a direct result of this trust deficit of the customer on the residential market of the city.

Some examples are as follows:

• Hitec is the main engine of growth for our city. From a residential market perspective probably this is one area where majority flagship residential projects have failed miserably. Hitec residential market is a mix of only a handful success stories and a lot of failed projects.
• One look at some of the main flagship projects and any customer would realize the challenges. Either a residential unit cannot be registered due to some dispute on title or non-compliance of government conditions wherein land was allotted by the government or construction seems stalled endlessly due to lack of funds or the project delivery schedule has been missed by years and site is nothing more than a hole in the ground or developer has given up on the project completely. Today it is hard to come across any flagship project in Hitec without any complication. The more complicated transactions are, the more confused the customer continues to be.
• Large projects used to be announced with a lot of fanfare but majority have actually not been delivered the way it was envisaged or worse not delivered at all.
• In a recent case, we are given to understand, that a developer in Hitec has sent out communication to customers expressing inability to continue with a particular project. The buyers are being encouraged to come together to built the balance project. Just imagine what financial / mental pressure the customers would be going through at this point in time.
• I was shocked to find out that in one of the residential projects of a leading developer of India, residents have placed 10ft plus banners on each balcony / gate / external wall detailing injustices done to them by the developer. Perception differences are always there of what the developer feels needs to be delivered or what the client feels he / she should get. One wonders how hard must the developer pushed residents / customers, for them to take up such a unique and public way of protesting.
• Some leading projects which hogged advertising front pages for years promising delivering couple of years back, even today are nothing more than holes in the ground.
• A successful Secunderabad based developer, marketed a large residential project during recession quite successfully. They then launched a larger project in the immediate vicinity. In the first project they failed / refused to deliver the clubhouse. This one negative has ruined sales, project progress, timelines for the second project.
• This kind of penny wise and pound-foolish attitude of some is ruining the market for everybody else.

Flagship projects being launched by the bigger developers and not getting delivered badly affects the buyers trust. If buyers come across a handful of such cases then they might presume the market is full of such scams. This affects everybody else in the market. Individual project failures / delays have a colossal affect on the investment sentiment of the entire city's residential market.

Another development over the past few years are that client expectations are changing quite fast. I was watching the new iphone6, apple pay and apple watch launch presentation the other day and realized how much client expectations are changing or made to change rapidly. During this presentation they showed a picture of a digital camera and a camera coder and asked the audience if they remembered these gadgets. I remember, in 2008 era these 2 gadgets were must have and today they are redundant. Timelines for such redundancy has reduced from decades to years to probably less than a year.

We can presume that from the time high quality / cost products like iphones / ipads were introduced consumer tastes have undergone a sea change. This is quite evident in the real estate sector. One has to compare the specs and amenities that projects provided prior to 2008-10 with present date projects and the difference is evident.

Customers today ask for the best of amenities, VRV air-conditioning, 100% power back-up, home automation, biometric locks etc. Mature markets like Bangalore seem to have now moved from gated community concepts to theme based community concepts. Obviously these kinds of features are asked for and clients are willing to pay for it. Clients have realized the value of luxury and are willing to pay for it. Today's market is not the erstwhile market of only the cheaper price tags selling. Customers today are looking for the best value luxury proposition than just a cheap buy.

All this advancement has made today's customers well informed about most things and especially the real estate market. They are bombarded with information and evaluate the pro's and cons of a project's location, amenities, specs, future prospects etc., quite well on their own. To further substantiate their understanding they talk to a circle of friends, bankers, colleagues, brokers etc. Today's customer is more than willing to work with a professional realtor / broker and pay for their services. This is also an important development since customer's value professional service and pay for it.

One common myth is that once a project is completed in all respects it would sell. A recent experience just proved the contrary. A developer launched his ready to move-in apartments with proper marketing support. Inspite of a good sales & marketing campaign, no units could be sold in the project. The main problem seems to be the location, area calculations and floor plans. Clients have become smart and they are not willing to invest just because a project is complete.

Few things the real estate sector would need to work on:

• Collectively improve the trust levels. Here the government can play a crucial role. Many projects are developed on land allotted by the government. The current government seems quite keen to improve brand Hyderabad. New investors will only come in when existing have had a good experience. Government should step-in and work with the developers to push for completion.
• The government approves all projects and they should check not just the title and floor plans but also financial viability of the project. If finance plan is put up a board and sell then such projects should not be approved.
• Developers and brokers will have to keep pace with the every changing taste of today's clients. Timely delivery becomes critical. A project might have the best of specs today and to be delivered in 2 years. If the same project were to be delayed then post delivery its specs would look archaic.

It our earnest hope that sales happen for all projects. The thrust of buyers can only be earned back collectively, for which all developers / builders / brokers will have to work together.