Infrastructure overhaul on the cards
The State government has announced an infrastructure makeover plan worth Rs 50,000 crore. The prime focus of the development will be stormwater drains, roads, and sewerage system in urban and rural areas. The existing Strategic Road Development Plan (SRDP) will also be fast-tracked and various flyovers, skywalks and junctions will be developed to ease traffic near HITEC city.
Ameerpet-HITEC City metro inches closer to completion
The soon-to-be-operational, Ameerpet-HITEC City metro stretch will not only bring the West and the East zones of the city closer, but improve the realty sentiment of the adjoining housing clusters. Key micro-markets that are likely to benefit from the development include Jubilee Hills, Maduranagar, Yousufguda and the IT hubs of HITEC City and Madhapur.
Over half of the structures violate building norms
Approximately, 50 percent of the properties in Hyderabad have reportedly been flouting the approved building plans. From the construction of additional floors to noncompliance with the norms, multiple issues have been identified. Majority of these structures are located in areas of Banjara Hills, Panjagutta, Kukatpally, Begumpet, Alwal, and LB Nagar.
Increased office space demand from global giants
The global corporate giant, Microsoft has leased four lakh sq ft of office space in HITEC City along with a 54-acre campus in Gachibowli. The Xander Group also expanded its footprints in the city and signed a deal worth Rs 2,550 crore with a local developer. The group not only plans to develop but also acquire 4.5 million sq ft office space in the city. Holistically, the developments will generate approximately one lakh job opportunities in the city and will eventually elevate housing demand.
An upsurge in the housing deals, infrastructure developments, and commercial expansion defined the health of Hyderabad’s realty sector in Oct-Dec 2018. Sales volume reported a marked improvement of 30 percent in Q4 2018 vis-à-vis Q4 2017; particularly after the city gained political stability. State government’s efforts towards boosting connectivity via elevated corridors, radial roads and new metro links also helped improve market sentiment.
In contrary to the burgeoning demand, supply remained erratic. Except for a few launches in West Hyderabad, new supply suffered on the back of the State elections and poor implementation of Telangana RERA (TRERA). Lack of awareness amongst developers about the registration process under TRERA significantly impacted the launch of new housing units. Small and stand-alone developers, who are yet to come in terms with the regulatory act, adopted a wait-and-watch approach. Only category A developers were seen ahead of the curve and moved seamlessly with the law. Despite timeline extensions, around 140 projects were registered under TRERA till December 2018.
Plotted developments along the NH-65 garnered healthy buyer interest. Investors seem to be focusing on plotted developments in the wake of slow-paced implementation of TRERA. The trend is likely to continue in the ensuing quarters. With supply being put on the back burner and demand growing at a steady pace, property prices are expected to go north. A pool of RERA-certified projects will help in tailoring the unmet demand and trigger the necessary price correction, particularly in areas such as Miyapur, HITEC City and Banjara Hills.
Hyderabad’s real estate market remained vibrant in Oct-Dec 2018. Despite a fleeting lull caused by the State elections, the city’s real estate landscape displayed resilience in the backdrop of expanding metro connectivity, augmented commercial leasing, proposed Regional Ring Road (RRR) and the extension of radial roads. Overall, the average capital values grew at the rate of two percent in Oct-Dec 2018 vis-à-vis Jul-Sep 2018.
Demand for residential apartments remained bullish across the city, pushing property values go north in Oct-Dec 2018 vs. the previous quarter. Barring a few micro-markets, almost 75 percent of the tracked localities in Hyderabad registered an upward price movement.
West Hyderabad, also acknowledged as the IT hub of the city, remained the most sought-after housing belt. Areas such as HITEC City, Manikonda and Kondapur captured maximum homebuyer interest and clocked around five percent growth in the average weighted capital prices, each, QoQ.
Nallagandla, a housing locale along NH-65 deserves a special mention owing to its rising popularity. Being an affordable haven in proximity to the financial district and having a plethora of academic centres such as the University of Hyderabad in its proximity, Nallagandla has emerged as a favoured destination among buyers looking for affordable properties. The average weighted capital values in Nallagandla noted a three percent growth, QoQ, and are pegged at Rs 4,850 per sq ft.
Invariably, 2 BHK units priced between Rs 60 lakh and Rs 80 lakh have been the prime choice of homebuyers in Hyderabad. However, the quarter ending December saw a marked shift in the investor interest towards mid-income properties ranging from Rs 40 lakh to Rs 60 lakh.
Plotted developments also regained momentum. Areas such as Shankarpally and Shamshabad witnessed increased popularity for small-sized residential plots priced within Rs 10 lakh. Maximum deals were recorded by the working professionals around the festive period.
The rental market experienced buoyancy and recorded a two percent growth in the average leasing values, YoY. HITEC City and Manikonda emerged as the most popular rental markets and posted eight percent hike in the average rentals, each, YoY. Nizampet also mushroomed as a promising rental housing destination with a five percent increase in rental rates. While IT professionals drove the rental demand in the former locations, student community helped Nizampet gain popularity.