Hyderabad Insite Report Jul-Sep 2015

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Hyderabad Insite Report_City Highlights_Jul-Sep 2015

City Highlights

Hyderabad realty market continued to show signs of improvement in Jul-Sep 2015. Inquiries increased but did not translate into sales, restricting the overall capital growth to a meagre one per cent. Sales predominantly took place in the west quadrant of the city.

Significant price movements in Hyderabad_Jul-Sep 2015

  • In absence of loans from banks and financial institutions, Private Equity (PE) and Foreign Direct Investment (FDI) brought the much needed liquidity to the Hyderabad realty market. Many developers tied up with foreign firms to channel funds to complete their existing projects.
  • West Hyderabad witnessed maximum number of new project launches in the quarter ending September 2015. Most of these projects fell in the Rs 40-60 lakh budget category.
  • Continuous delay in the construction of Outer Ring Road (ORR) and the metro project forced developers to hold back project launches in East Hyderabad. Both projects are now expected to be delivered in the first half of 2016.
  • Water and power woes continued to trouble the residents. With ground water depleting, the problem has taken a major toll on localities close to the IT hubs.
  • Even though the market is showing some signs of improvement, developers in the city are wary of increasing property prices, especially in new projects. The festive season is expected to draw better sales volumes. Predictably, demand for ready-to-move properties in Hyderabad is high in comparison to under-construction or newly launched projects. Also, properties available in gated communities are most sought after due to the amenities offered in them.
  • Though the overall demand for commercial offices and retail sector improved in the city, those available in Central Business Districts (CBDs) recorded high vacancy rates.
  • The Telangana Registrations and Stamp (R&S) Department recorded a 37 per cent rise in property registrations in Hyderabad and Ranga Reddy district from April to August this year. Registrations have increased in LB Nagar, Kompally, Ghatkesar and Shamshabad. 

Key influencers in Hyderabad_Jul-Sep 2015

Capital Analysis

  • Top performers in Hyderabad_Jul-Sep 2015Almost half of the localities tracked in Hyderabad witnessed a rise in capital values, whereas over 40 per cent recorded a dip in Jul-Sep 2015. Bandlaguda, Kothapet and Hydershakote emerged as top grossers with an average capital growth of 13 per cent each. 
  • While Kothapet benefited from the under-construction metro, Bandlaguda and Hydershakote gained from being strategically situated amidst the Hyderabad Elevated Expressways and the Jawaharlal Nehru Outer Ring Road. 
  • Banjara Hills, one of the premium localities of Hyderabad, witnessed a drop of 12 per cent in capital values. Even though the market is reviving, the luxury segment has restricted takers in Hyderabad. 
  • Property prices in Shaikpet, Kondapur and Bachupally registered an average rise of nine per cent each, during Jul-Sep 2015. New launches by prominent developers in Kondapur and the presence of gated communities and societies helped these localities gain traction. 
  • Realty market in Hi-Tech City and Miyapur, the IT hubs of Hyderabad, plateaued with no change in capital values during Jul-Sep 2015. 
  • The presence of ready-to-move properties helped localities along the Mumbai Highway, such as Lingampally, Chandanagar, Nizampet and KPHB, score over others and register capital growth to the tune of three to six per cent. 
  • After appreciating by five per cent in Apr-Jun 2015, the real estate market of Gachibowli stabilised during Jul-Sep 2015. The prices in the locality dipped by seven per cent this quarter. Similarly, property prices in Madhapur surged up by three per cent in Apr-Jun 2015 and dropped by two per cent in Jul-Sep 2015. 

Rental Analysis

  • Top performers in Hyderabad_rental values_Jul-Sep 2015Hyderabad’s rental market dipped by three per cent between Jan-Mar 2015 and Jul-Sep 2015, with over 50 per cent of the tracked localities registering no change in rental values. 
  • The growth in commercial office and retail market of Hyderabad is yet to create a positive impact on the residential leasing sector. 
  • Interestingly, about 80 per cent of the residential apartments available for rent in the city are 2BHK and 3BHK units. Other units are not as preferred and the supply is also limited. 
  • While commercial office leasing gained volumes in Hi-Tech City, Kukatpally and Madhapur in West Hyderabad, residential rental values remained dormant. 
  • Banjara Hills and Jubilee Hills, two of the premium localities for leasing in Central Hyderabad, witnessed no change in rental values in the last nine months. Both these localities essentially offer spacious society apartments with an average area of 1500 sq ft. 
  • Nanakramguda, the financial district of Hyderabad, registered a dip of five per cent in rental values in the first half of the year. Begumpet and Kondapur registered an eight per cent drop in rental values in the same period. 
  • Majority of the 3BHK units available for rent are located in Gachibowli and Kondapur. Supply of 1BHK and 2BHK units was high in Kondapur and Madhapur. 
  • Hyderabad’s residential rental market is chiefly dominated by society apartments, with a gigantic 70 per cent availability. Independent houses and villas form almost 20 per cent share of the total market supply for rental accommodation. 

Supply Analysis

Supply of under-construction properties increased in Hyderabad during Jul-Sep 2015, as against the previous quarter. Majority of the supply in the city was concentrated in the mid-income and high-income housing segments.

Availability of Different Property Types

  • Supply by property type in Hyderabad_Jul-Sep 2015Supply of residential apartments increased by eight per cent in Jul-Sep 2015 and stood at 70 per cent. Buyers’ preference and high profit margin drove developers to construct projects with apartments. During the same time, supply of residential houses and villas dipped by five per cent. 
  • Maximum supply of residential apartments in Hyderabad is concentrated in the price range of Rs 25-60 lakh. Demand, too, lies in the same segment, with very few takers for premium residential apartments priced above Rs 1 crore. 
  • A shift in the supply trend of independent houses and villas was witnessed in Jul-Sep 2015. In Apr-Jun 2015, most of these properties were available in the Rs 25-40 lakh category, while in this quarter, they were concentrated in the Rs 40-60 lakh bracket. 
  • Majority of the units in all the property types were ready for possession. Construction of over 90 per cent of the total builder floor inventory, 60 per cent of independent houses and villas, and 55 per cent of residential apartments was completed. With more number of developers concentrating on completing projects, supply of ready to move properties is on the rise. 
  • Currently, end users dominate the Hyderabad real estate market and they prefer ready-to-move-in properties. To this end, localities with largest number of ready-to-move units witnessed maximum traction in the last six months. 
  • Similar to the previous quarter, over 70 per cent of the builder-floor units were available in the affordable and mid-housing segment. 

Availability of Property by Budget

  • Supply by budget in Hyderabad_Jul-Sep 2015Supply of affordable housing (within Rs 25 lakh) and mid-income housing (Rs 25-40 lakh) dropped in Hyderabad during Jul-Sep 2015. On the other hand, supply of high-income housing (Rs 40-60 lakh), luxury housing (Rs 60 lakh- Rs 1 crore) and ultra-luxury housing (Rs 1-5 crore) increased during the same period. 
  • Almost equal percentage of ready-to-move and under-construction properties were available in the high-income housing segment. In the mid-income segment, almost 70 per cent of the properties were ready-to-move. 
  • Majority of the properties in Hyderabad continued to be available in the mid-income and high-income segments. 
  • Of the total number of new launches that took place in Jul-Sep 2015, majority were within the budget of Rs 25-60 lakh. Demand, too, is high in this price bracket. 
  • End users in Hyderabad are unwilling to put in their money in high-end properties, especially in Central Hyderabad, as there are several competitive deals available in other regions. Buyers are also shying away from the affordable bracket, as these properties are scattered in the outskirts where infrastructure facilities are primitive. 
  • Almost half of the inventory worth Rs 1-5 crore (ultra-luxury housing) was in the form of independent houses and villas. There is hardly any fresh supply of villas in the city, as old ones are not seeing any takers. 

BHK-wise Distribution of Property

  • Supply by configuration in Hyderabad_Jul-Sep 2015Hyderabad witnessed a drop in the supply of smaller units (1BHK and 2BHK), while supply of larger units (3BHK and 4BHK) increased during Jul-Sep 2015. There is an almost equal demand for both 2BHK and 3BHK configurations. 
  • About 90 per cent of the 1BHK units available were ready for possession, while the rest were under-construction. 
  • About 62 per cent of the 2BHK units available in Hyderabad were ready to occupy, while 38 per cent were under-construction. As compared to the previous quarter, there was an increase in supply of under-construction 3BHK units. This is probably because most of the new launches offered this configuration. 
  • Almost half of the 2BHK units were available in the budget of Rs 20-40 lakh. The 3BHK category, on the other hand, was a bit expensive, with about 67 per cent of them being offered within Rs 40 lakh to Rs 1 crore. 
  • Demand for 2BHK units is high in areas close to Hi-Tech City such as Miyapur, Gachibowli, Manikonda, while 3BHK units are being demanded in areas such as Kondapur, Chanda Nagar and Nizampet. 

 

Ready to move in vs Under-construction

  • Supply by status of construction in Hyderabad_Jul-Sep 2015Launch of new projects by some renowned developers during Jul-Sep 2015 led to an increase in the supply of under-construction properties in Hyderabad. The category saw a six per cent rise in supply and stood at 45 per cent. Most of these new launches took place in West Hyderabad. 
  • Majority of the ready-to-occupy properties were available in the budget of Rs 25-40 lakh, followed by Rs 40-60 lakh. On the other hand, under-construction properties were mostly available in the budget range of Rs 40-60 lakh, followed by Rs 60 lakh to Rs 1 crore. 
  • About 46 per cent of the ready-to-occupy properties featured 2BHK units, while 40 per cent had 3BHK units on offer. Among the under-construction properties, 3BHK units formed 55 per cent of the total share, while 2BHK constituted 35 per cent of the inventory. 
  • Ready-to-move properties available in Central Hyderabad remained unsold primarily due to the high price tag, while those available in areas close to IT hubs of West Hyderabad were consumed quickly. 
  • Not many home buyers are willing to put their money in under-construction units right now. This is mainly due to the uncertainty looming over the possession timelines. 

 ANNEXURES

CAPITAL
VALUES

Locality

Jul-Sep 2015

% Change

CAPITAL
VALUES

Locality

Jul-Sep 2015

% Change

 

Alkapuri

2600

0

 

Miyapur

3000

0

Ameerpet

4150

2

Nagole

2700

-4

Appa Junction

3100

7

Nallagandla

4600

8

AS Rao Nagar

2400

2

Nanakramguda

4500

-1

Attapur

3200

7

Narsingi

2600

-4

Bachupally

2500

9

Nizampet

2300

5

Bandlaguda

3000

13

Pragati Nagar

2350

-2

Banjara Hills

7500

-12

Puppalaguda

2500

-4

Begumpet

4350

-3

 

 

 

Chandanagar

3000

3

RENTAL
VALUES

Locality

Jul-Sep 2015

% Change

Dilsukh Nagar

2700

-2

 

Appa Junction

12

0

Financial District

4650

0

Banjara Hills

15

0

Gachibowli

4100

-7

Begumpet

12

-8

Hafeezpet

3600

-1

Chandanagar

10

-9

Hi-Tech City

4500

0

Gachibowli

15

-6

Hydershakote

3100

13

Hi-Tech City

15

0

JNTU

2850

2

Jubilee Hills

14

0

Jubilee Hills

7250

-1

Kondapur

12

-8

Kondapur

4100

9

Kukatpally

12

0

Kothapet

3050

13

Madhapur

14

0

KPHB

3750

6

Madinaguda

9

-10

Kukatpally

3550

8

Manikonda

10

0

LB Nagar

3000

5

Miyapur

10

0

Lingampally

3550

4

Nanakramguda

20

0

Madhapur

4750

-2

Nizampet

7

0

Madinaguda

3000

-9

 

Manikonda

2950

-9

*All prices are per sq ft rates

*Capital values represent quarterly change.

*Rental values represent half-yearly change.


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