There could be slight hurdles for the real estate market in Hyderabad, now that the Government of the state has changed. While most Indian cities have been witnessing steady real estate growth, Hyderabad has been growing even faster. Reports state how new launches went up by 48% between 2021 and 2023, while sales figures tripled by 143%. Property rates have also increased, with the average residential price standing at Rs. 11,323 per sq. ft. in the January-March quarter in 2024. This indicates 9% of appreciation from the same quarter last year as per reports. The prices are just behind Mumbai, making Hyderabad the second-costliest market now among the country’s leading eight cities, well ahead of Delhi-NCR and Bengaluru.
Average residential prices in northwestern Hyderabad have gone up considerably over the last few years, with average prices in this micro-market easily crossing Rs. 10,000 per sq. ft. by end-2023. This indicated an increase of almost 25% from 2021 as per reports. The Senior VP at Square Yards, Nomaan Ellahi, states that several people from Andhra have already paused/stopped purchasing properties in Hyderabad over the last six months. He also states that there are no immediate/sudden changes anticipated, although buyers from the Andhra side may start dropping, which will clip growth to an extent in the city.
This indicates an upcoming course correction in the housing market in the city. Reports also indicate how property sales in FY24 came down by 8.7% (74,942 units as compared to 82,150 units for FY23). Hyderabad was the capital when both the Telugu states remained united and a part of its property boom is attributed to those from the other side. It is a preferred location for those from Andhra owing to its opportunities for employment and higher education, along with high-quality healthcare and entertainment. With the possibilities of a newer capital or another growth centre/hub coming up, the sheen of the city may diminish to an extent. Already, commercial properties have more than 25% of vacancy levels, with unsold inventory of 1 lakh residential units as well.
The success story of the city has a lot to do with political will according to industry watchers. The same story may play out in other cities in Andhra as well. There could be another alternate market coming up in the next three or four years, like Navi Mumbai and others. Such a hub with more competitive pricing may take away some investments from Hyderabad, thereby correcting its property prices temporarily. Of course, it will be hard to replicate the city’s success, considering its huge IT and ITeS talent pool, legacy, and developed commercial centers. It is also known for its flourishing manufacturing, industrial, logistics, education, and healthcare sectors. In this context, some experts feel that property prices may moderate temporarily, although a sudden decline is not likely owing to strong underlying demand. Some also feel that the development of the neighboring state could also have a ripple effect on the market, particularly with the development of the Hyderabad-Vijayawada Highway (multiple industrial parks and infrastructure projects). Andhra Pradesh’s future development may thus impact the real estate market in Hyderabad in multifarious ways according to industry players. Yet, it is clear that a course correction is in the offing for now.
For a detailed report on this read the articles we were featured in:
Ndtvprofit: https://bit.ly/3VyNNVW
Published Date: 7 June, 2024
