With moderation in Covid restrictions and rampant vaccination drives, the housing market in Hyderabad seems to have recuperated pretty well. In Q1 2022 alone, the city witnessed a massive 83 percent year-on-year growth in new project launches. Square Yards dives deep to reveal the reasons for this sudden increase in the supply of residential property units in the city.
Hyderabad’s housing market has seen a noticeable increase in the supply of residential property since Q1 2021 that peaked in the Q1 of 2022. The hike in supply has come at a time when an increasing number of people have been looking for a permanent housing solution to meet their needs.
With the pandemic now seemingly under control, a holistic approach to residential property launches was noticed. Square Yards research has shown that over 20K new residential housing units were launched in Hyderabad in the first quarter of 2022, with West Hyderabad grabbing the maximum share of 52 percent with over 10K launches.
What is more interesting to note is that out of all the property types, independent housing grabbed the highest 43 percent demand share in Q1 2022. But despite the high demand, the supply of independent housing options held a low share of just three percent. This can also be attributed to the emerging trend, where majority of the developers in Hyderabad are keen on offering plotted developments, the same comprising a lion’s share of 73 percent of the total supply in Q1, 2022 as well .
Weighing out all the components of the data, Square Yards investigates the reason behind the spike in new launches in Hyderabad along with the resurgence of the demand for independent houses.
Table of contents
Demand and Supply Dynamics
According to Square Yards research, the first quarter of 2022 exhibited a massive jump in new residential project launches. Given below is an in-depth analysis of the demand and supply dynamics witnessed in Hyderabad, drawing a comparison of the consumer’s home buying mentality based on property type and price bracket.
Dynamics Based on Property Type
While space has always been one of the most crucial factors governing any home buying decision, it seems to have escalated even more in Q1 2022. This is because even though housing inventory in Hyderabad with 2, 3 and 4 BHK configurations dominated the market, more people were seen to gravitate towards independent houses.
A demand and supply research carried out by Square Yards has revealed that around 43 percent of the residential property demand in Q1 2022 was for independent housing units. This was followed by plots at 22 percent share, apartments at 21 percent share and villas and builder floors with 10 percent and four percent share, respectively.
While the surge in demand for residential housing options reflects the property buying sentiments and demographic of the city, the rise in demand for independent housing in particular has demonstrated the changing needs of potential homebuyers.
Since independent housing options tend to be generally more expensive than apartments, builder floors, or plots, the sudden rise in demand can be attributed to the higher purchasing power of the people in the city along with the concept of spacious housing units still reigning the buyers sentiments . Apart from it, a sturdy desire to acquire multi-storeyed, gated properties for enhanced security, privacy and ownership could also be crucial reasons for the same.
Additionally, this could also indicate a returning trend of the city’s traditional housing needs. The craze for new age apartments and builder floors in southern cities like Hyderabad developed way later than it did in other metropolia of MMR, Gurgaon, Noida, etc. Taking into account the diverse working class population of the city, independent housing options may also be viewed as a potentially profitable investment option in terms of future return.
However, against its massive demand share of 43 percent, the supply share of independent houses was only a meagre three percent. This can be attributed to the fact that this desire of owning independent spaces is fairly new in the city which is yet to be tapped by potential developers.
But, on the flip side, according to Square Yards research, plots in Hyderabad enjoyed a majority of 73 percent supply share in Q1 of 2022. Apartments had a 12 percent share in market supply, while builder floors had a nine percent share. Villas had the same supply percentage share as independent houses.
Dynamics Based on Ticket Size
In terms of the budget preference of homebuyers, Square Yards found a staggering demand share of 55 percent for property price ranges between Rs 30 to 100 lakhs in Q1 2022. This can indicate a rising preference for mid segment housing, especially for a populace of nuclear families.
A further analysis of this price range preference also indicates a spiked demand for new property launches in the city outskirts and developing zones as prices of properties in these localities are comparatively lesser than in the main city. This demand is almost met by 45 percent of the supply share of properties in this bracket in the housing market, creating an amicable demand and supply equilibrium in Q1 2022.
However, this does not mean that prospective homebuyers are not looking for larger housing. About 24 percent of the demand share for properties ranging between Rs 1 to 3 crore has been witnessed in Q1 2022. This indicates a prominent shift in buyers’ preferences for larger spaces, especially independent houses. Similar patterns were noticed when the demand and supply paradigms of property types and property price ranges were further analysed.
While independent houses had a demand share of 43 percent against a supply share of just three percent, property prices ranging from Rs 1-3 crore also maintained a similar pattern with a demand share of 24 percent and a supply share of just seven percent.
This indicates that within the realm of larger properties the demand for independent houses is making a significant impact. And even though the supply shares are quite low as of Q1 2022, gradually growing demand for such property types may push developers to build the same in the near future.
Another eye grabbing data is that properties less than Rs 30 lakhs and those ranging from Rs 60 to 100 lakhs have the same demand share of 18 percent. This data indicated another set of homebuyers in the Hyderabad housing market in Q1 2022.
Demographically, while the ones in the less than Rs 30 lakh bracket may involve mostly the demand of working individuals and/or couples looking for stable housing, the preference for properties worth Rs 60 to 100 lakh may indicate either the need for budget homes amidst joint families or nuclear ones looking for more affluent options.
All in all, Square Yards data strongly points out the rising trend or the comeback of Hyderabad’s old housing culture via the increased demand for independent houses.
see also@ Top Six Cities Witness Over 81K New Residential Launches in Q1 2022
Top 5 Most Searched Locations in Hyderabad
Attapur, ECIL, Boduppal, Keesara and Kompally were the top five most searched locations in Hyderabad for the first quarter of 2022.
Attapur
Situated along the PV Narasimha Rao Expressway, Attapur is one of the most premium locations in Hyderabad owing to the immense growth of its residential sector. It stretches for over 7 kilometres and is extremely well connected to the central part of the city and other prominent locations like Mehdipatnam, Tolichowki and Lakdikapul.
The high demand for residential property in this location can be attributed to its seamless connectivity, superior social and retail infrastructural facilities like schools, shopping centres, malls, etc. The diverse working class population and the locality’s proximity to major employment hubs also play major roles in driving the demand for residential units here.
Square Yards research has shown that interested buyers can buy any of the new project launches in Attapur at an average starting price of Rs 4,285 per square feet. Most of the properties in this area lie in the price bracket of Rs 30 to 60 lakhs. In this price range, potential buyers could acquire a 2BHK apartment in any of the multi storey housing complexes.
ECIL
ECIL is one of the fastest growing and developing residential localities in the city. Kushaiguda, Kapra and Cherlapalli are some of the surrounding localities of this area. One of the key drivers for residential demand in this locality is its connectivity and proximity to prominent IT parks like Infosys SEZ Campus. This locality is connected with the prominent parts of the city via the Inner Ring Roads, PV Narasimha Rao Expressway and the Nehru Outer Ring Road.
Being dominated mostly by independent housing projects, ECIL enjoys great connectivity to some of the most prominent healthcare centres, shopping malls and educational institutions. Venkateshwara Hospital and Xenia Multi Specialist Hospital are some of the leading healthcare institutes in the area. Further, this locality is also perfect for young professionals looking for a permanent housing solution, as it is in close proximity to various employment hubs like Raheja Mindspace and Infosys SEZ Campus.
Potential homebuyers can acquire new properties in ECIL at an average starting price of Rs 4,690 per square feet. Square Yards research has shown that buyers could acquire budget 2BHK or 3BHK residential units in this area within a price range of Rs 30 to Rs 60 lakhs in this locality.
Boduppal
Boduppal is one of the leading developing areas located on the eastern periphery of Hyderabad. The locality has been highly demanded in the first quarter of 2022, owing to its affordable prices and superior connectivity to employment avenues like Nacharam and Pocharam. Further, located between Nacharam-Mallapur Road and NH 163, this area is also very well connected to the prominent locality of Uppal.
The NH 163 also provides excellent connectivity to the centre of the city and is just 15 minutes away from the railway station. Moreover, Boduppal is also well connected by the Blue Line of the Hyderabad Metro. The Uppal metro station is also just 15 minutes away. Even though this area does not have any major shopping areas, it does have some superior healthcare institutions like LifeSpring Hospital, Aditya Hospital and Ankura Hospital.
Potential buyers can acquire any of the new properties in Boduppal at an average starting cost of Rs. 4,450 per square feet. Individuals can acquire a 2 BHK or 3BHK in the range of Rs 30 to Rs 60 lakhs and Rs 60 lakhs to Rs 1 crore, respectively.
Keesara
Keesara is one of the fastest growing residential localities, situated in northeastern Hyderabad. The demand for residential properties have gained traction in the first quarter of 2022, owing to its booming infrastructural development and close proximity to other prominent areas of the city.
Further, the locality also has an abundance of commercial complexes, supermarkets, banks, fitness centres, etc., which make this locality one of the most searched in terms of residential properties.
Potential buyers can acquire any of the newly launched properties in Keesara at an average price of Rs. 4,490 per square feet.While most properties in this locality fall in the Rs. 30 lakhs to Rs. 60 lakhs category, one could also acquire a 3BHK housing unit in the price range of Rs 1 crore to Rs. 3 crore. Most of the properties in this locality are available as residential plots.
Kompally
Kompally is situated alongside the NH7 and is one of the most rapidly developing residential localities in the city. The heightened demand for properties in this area are mainly driven by affordable prices and its convenient location.
It is known to be a peaceful residential area, with superior social infrastructure catering to the needs of working professionals. Kompally is in close proximity to three major employment hubs of the city, namely Banjara Hills, HITEC city and Begumpet.
Its location near NH 7 and Outer Ring Road further ensures a seamless connection to the airport and railway station. The increased demand for a property in this area can also be attributed to the development of the second phase of the Outer Ring Road, which will further improve connectivity to Gachibowli and the international airport in Shamshabad.
While most new project launches in Kompally are available as apartments, one could acquire a unit at an average price of Rs. 4,540 per square feet. Most properties in this area lie within the price bracket of Rs 30 to 60 lakhs.
see also@ Luxury Homes in Bangalore Experience Over 30% Demand in Q4 2021 & Q1 2022
Bottomline
Square Yards research indicates there has been a noticeable increase in demand for residential properties in Hyderabad in Q1 2022. There have been over 20,000 new project launches in Hyderabad in the first four months of the year, augmenting the percentage share of new residential launches in the city to a whopping year-on-year rise of 83 percent.
Along with the new launches, what’s key to note here is the massive rise in the demand for independent houses, indicating a returning trend of Hyderabad’s traditional housing culture. Of the total demand share, 43 percent demand was for independent residential options.
This demand pattern also screams the ever increasing need for larger and more private housing options at relatively affordable prices. Lucrative offers from developers, completion of pending projects, increased employment growth, and favourable support policies also play significant roles in augmenting the potential buyer’s increased confidence in the Hyderabad housing market.
