Hyderabad metro rail opens to public
The city’s most awaited project, Hyderabad metro, commenced its operations under phase I. Constructed at a cost of Rs 15,000 crore, the 30-km long route between Miyapur and Nagole has 24 stations that will help decongest traffic on several busy stretches in the city. It is also anticipated to be a game changer and boost housing demand in the adjoining areas.
Telangana to introduce online land registration system
The State government will soon launch an online land registration system based on the concept of core banking network which is expected to eliminate illegal land transactions. Under the new system, land owners would be able to see updated land registrations, mutations and transactions online within hours of such activities.
IT corridor drives Hyderabad’s office leasing
The western quadrant including Hitec City, Gachibowli and its adjoining areas that constitute the Secondary Business District (SBD) continues to witness robust office leasing activities by IT giants such as Microsoft, Oracle and Google. This has triggered residential real estate demand in nearby localities.
Industry looks forward to MMTS-II launch
The sector is eagerly awaiting the launch of second phase of Hyderabad Multi-Modal Transport System (MMTS). Once operational, it will strengthen connectivity and cut travel time on several busy routes in the city including Alwal and Secunderabad, Secunderabad and Ghatkesar and Hitec City and Pocharam.
City awaits social infrastructure makeover
Hyderabad is expected to get a major facelift with several social infrastructure projects including a football stadium in Barkas, five-storey market at Nehru Nagar and a stormwater drain at the Chintalkunta Checkpost being approved by Greater Hyderabad Municipal Corporation (GHMC). Additionally, the authority’s plan to upgrade key roads will augment road infrastructure.
The continuous delay in setting up a permanent RERA body along with an appellate tribunal kept Hyderabad’s real estate market under pressure in the last quarter of 2017. While most of the enquiries were witnessed in the mid-income housing segment, not many of these translated into sales due to the wait-and-watch approach of prospective homebuyers. Modest sales volume across all budget brackets, along with persistent confusion over RERA and GST, restricted developers from launching new projects in the second half of 2017.
The unveiling of Hyderabad metro was one of the major accomplishments this quarter. Connecting Miyapur to Nagole via Ameerpet, the metro will decongest traffic on several busy routes across the city. The same is expected to prompt developers to shift their focus from the established western quadrant to housing pockets along the metro route. Despite GST disrupting the city’s commercial real estate market in Q3 2017, office space leasing along the IT corridor continued to flourish and entice technology giants. With increasing pre-commitments and expansion plans of large size occupiers, the city is expected to see a healthy demand for office space in the next couple of years. This will subsequently drive residential sales and leasing segments.
While the average weighted capital values in Hyderabad remained stable in Oct-Dec 2017 over the previous quarter, the rental market witnessed an upswing of four percent in ‘ask’ rates, YoY. Improvement in the connectivity quotient, due to the steadily expanding metro network, worked in favour of the western quadrant. The already developed West Hyderabad is expected to witness greater buoyancy in the future.
- The city’s real estate market maintained status quo in terms of enquiries received in the quarter ending December 2017, most of which, were for apartments under Rs 40 lakh price bracket. The same, however, could not translate into sales due to ambiguity over RERA and GST.
- The commercial hub of North Hyderabad – Begumpet – emerged as the frontrunner, clocking five percent growth in average capital values, QoQ.Strategic location, sound social infrastructure, proximity to the IT corridor and a robust transport network including the recently launched Hyderabad metro attributed to the region’s growth.
- The impact of the most anticipated Hyderabad Metro Rail project was visible on the realty markets along the Miyapur-Nagole stretch particularly, Miyapur and Boduppal, with both the localities recording an upsurge of 3-4 percent, each, in capital ‘asks’, QoQ. Appa Junction and Manikonda in the western part of the city continued to garner healthy traction from end users due to affordability and proximity to employment hubs.
- Amidst stable housing demand, the city’s rental segment continued to grow, recording a four percent average growth over the last one year. Renowned micro-markets in the West such as Manikonda, Kondapur and Hitec City witnessed maximum residential leasing activities, also indicating meek buying sentiment. These localities observed rental ‘asks’ soaring by 6-8 percent, YoY, respectively.
- Absence of a permanent regulatory authority and uncertainty over GST restricted developers from launching new projects in Oct-Dec 2017. Home buying sentiment was further marred by the recent Bombay High Court ruling which upheld the constitutional validity of RERA thus, making the law applicable to all incomplete projects where completion certificate has not been issued by May 1, 2017.
- Property sales are expected to revive in the next two quarters since developers are positive about the setting up of a RERA body and an appellate tribunal by then. The city is also foreseen to touch its highest office space absorption of approximately 7.5 million sq ft this year, on the back of strong demand and improving occupier interest.
The Oct-Dec 2017 quarter saw developers grappling with RERA and GST norms, resulting in limited number of new launches in the city. Sales volume across all budget categories continued to remain under pressure on account of absence of a permanent RERA body, which led first-time homebuyers to hold back their purchase decisions. Some investors returned to the market and helped bridge the demand-supply gap to take the city closer to an equilibrium. With speculations around the establishment of a permanent regulatory authority in 2018, developers are looking to announce new projects in the next two quarters.
- The overall demand for residential apartments in the city remained unmodified due to the non-formation of a permanent RERA body and an appellate tribunal. The city was seen getting acclimatised to GST and RERA and reported docile buyer sentiment.
- Despite no new launches, supply of under-construction apartments saw a marginal increase of three percent as sellers returned to the market.
- Affordable and mid-income housing segments witnessed maximum buyer traction due to several initiatives being taken by the Union government including the ambitious Pradhan Mantri Awas Yojana (PMAY). The recent changes in Credit Linked Subsidy Scheme (CLSS) are also seen as growth stimulators for the budget housing segment in the city.
- While demand for mid-income housing segment saw a slight increase of three percent, its supply remained stable, resulting in a 16 percent shortfall of inventory in this budget bracket. On the contrary, the luxury housing segment (Rs 60 lakh - Rs 1 crore) witnessed an oversupply, depicting poor appetite for this budget bracket in Hyderabad.