HYDERABAD: A recent policy aimed at compensating landowners and fostering urban growth has sparked fresh controversy in Telangana’s real estate sector. Following the state government’s announcement last month mandating the use of transferable development rights (TDR) for certain high-rise buildings and allowing their use for setback relaxations, TDR prices have surged significantly across Greater Hyderabad.
Builders, developers, and everyday property owners are now voicing concerns over what they view as an artificial price spike and potential market manipulation. TDR serves as a certificate awarded to landowners who relinquish property for public use, such as road expansion or infrastructure projects. Instead of receiving direct financial compensation, these owners obtain development rights that can be utilized on other properties or sold on the open market.
What was intended to be a support mechanism for displaced landowners has now morphed into a speculative market. Industry insiders report that TDRs, which historically traded at 25% of their total value, are now being quoted as high as 70%. Notably, large developers purchasing in significant quantities are reportedly securing rates closer to 56%, according to members of real estate developers’ associations.
The scope of the market is substantial; a January 2026 report revealed that the Greater Hyderabad Municipal Corporation (GHMC) had issued TDRs to 1,585 individuals, covering approximately 1,070 acres (51.83 lakh square yards). Out of this, around 712 acres (34.49 lakh square yards) have been utilized, while roughly 316 acres (15.31 lakh square yards) are still available.
Recent data from the state-run TDR bank indicates that 1,967 individuals have now received TDRs, with an estimated value of nearly Rs 9,000 crore worth of TDRs available as per January estimates.
This raises a key question: If such a large quantity of TDR is available, why have prices increased so sharply?
“When the government records show a substantial quantity in the market, why is there a sudden spike in TDR prices? The government needs to take action against those illegally hoarding TDRs and driving up prices,” said N. Sridhar, a resident of Gopanpally. Sridhar, who intended to utilize TDR for adding an extra floor to his property, notes that obtaining these certificates is challenging for individuals. When available, brokers are quoting rates nearing 70% of the value.
Under the new government order issued last month, TDR has become mandatory for certain types of high-rise construction. Buildings with 10 to 20 floors must utilize 3% of the required built-up space through TDR, while structures exceeding 20 floors must utilize 5%. Developers are required to submit 50% of the TDR at the application stage and the remaining 50% prior to receiving the occupancy certificate. For non-high-rise buildings, TDR can aid in obtaining setback relaxations.
The government asserts that the policy aims to boost TDR utilization and fairly compensate those who have lost land for public endeavors. However, industry analysts claim that a significant portion of TDR has become concentrated in the hands of a few influential individuals.
“While the government’s intentions may be valid, much of the TDR has been acquired by a select group, creating a type of cartel that has artificially created scarcity, thus inflating prices. There are reports within the industry that one individual obtained around Rs 600 crore worth of TDR through benami transactions,” stated a former official of a real estate organization. He emphasized that addressing issues related to black-market practices falls under the government’s authority.
Allegations of an informal trading network also persist. Some brokers reportedly gain access to TDR recipient information from municipal town planning officials and directly approach landowners.
“When we learn that someone has received TDR after losing land to road expansion, we approach them and negotiate agreements at a fixed price. Once higher rates are established, the original holder uses a mobile OTP to finalize the transfer during building approvals. We receive a commission from the buyer,” explained an anonymous broker.
He further mentioned that smaller brokers have been gradually squeezed out of the market, as wealthy investors began directly acquiring TDRs from landowners, tightening supply and exacerbating price pressures.
In theory, TDR is a straightforward concept: additional built-up area granted in exchange for land surrendered for public use. However, the reality within Telangana has evolved into a contentious issue, raising ongoing concerns about accessibility, pricing, and market control.
