The last quarter of 2019 witnessed multiple factors preventing Hyderabad’s real estate market from succumbing to the current economic slowdown. Connectivity upgrades including the commencement of HITEC City-Raidurg metro route, the construction of arterial roads and elevated corridors in and around IT hubs of Gachibowli, HITEC City and Tellapur improved the city’s liveability quotient further. These clubbed with a reduction in the cement prices by Rs 10-35 per 50 kg and consistent influx of working population to the city augured well for the housing industry. The city recorded a cent percent jump in the annual commercial leasing, which stood at 9 million sq ft, trailing only behind Bangalore with an average commercial leasing of around 13 million sq ft. Sales also witnessed a four percent rise, YoY, with around 17,000 units getting sold in 2019.
On the back of robust capital infusion in the commercial sector in Hyderabad, average property values went north, although marginally by a percent, QoQ. The future, too, looks bright with Telangana government’s emphasis on decentralising the realty growth across all the zones.
After implementing LEAP (Look East Policy), Hyderabad GRID (Growth In Dispersion) code would propel the real estate activities in southern and northern parts of the city.
Several tax sops such as waiver of development fee and impact fee allured developers to put up their realty projects in areas other than West Hyderabad.
Areas such as Uppal, Pocharam, Bachupally, Shamshabad, Usmannagar, Kompally and Budwel would reap maximum benefit
The year ended for Hyderabad with an improvement in sales volume over the previous year, owing to a limited number of new launches and consistent demand for housing units. The trend is expected to continue in the ensuing quarters unless the liquidity crisis faced by the developers eases. Areas such as Kukatpally, Madhapur, Kondapur, Gachibowli, Raidurgam and Kokapet remained at the centre of new supply in the city due to their proximity to the IT hubs.
Areas from Uppal to Bhuvanagiri and Warangal Highway are expected to house maximum constructions in the coming months due to the operationalisation of the metro corridor from Nagole to HITEC City. Like previous quarters, the IT corridor stretching from Madhapur to Gachibowli and the Financial District in West Hyderabad ruled the roost. However, with the announcement of the GRID policy, investment queries doubled in South Hyderabad. Land parcels priced below Rs 10,000 per sq yards remained popular in Shankarpally, Maheswaram, Srisailam Highway, and Kokapet. Localities such as Kokapet, Tellapur, Nagole, and Nallagandla recorded an uptick of 3-4 percent, each, in the capital rates, in Oct-Dec 2019 vis-à-vis Jul-Sep 2019. The rental market, however, showed an uptick of three percent in the ’ask’ rates, YoY. Small-sized apartments remained popular among homebuyers and tenants in this quarter, too. Ameerpet, Madinaguda and HITEC City were some of the prominent areas in the city which recorded a surge of 8-9 percent in the average rentals, YoY.
While average weighted property prices did not witness a steep rise in Hyderabad, sentiment remain positive throughout Oct-Dec 2019. Government initiatives, proposed infrastructure plans - GRID and LEAP, reasonable cost of living and robust investment in commercial and retail segments are expected to reap healthy results for the realty market in future. The problem at hand, however, remains limited housing supply against improving demand. While developers are playing on the back foot due to liquidity constraints, the current inventory in the city will only take around three quarters to get completely disposed of. The challenge is an unheard one for other metros, which are battling due to humongous unsold inventory.