Hyderabad Insite Report Jul-Sep 2014

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Mixed use development

City Highlights

The separation of Telangana led to speculations of a revival in Hyderabad’s realty market. However, the positive impact-if any-is yet to be witnessed. Currently, the partition of the two states, consequent bifurcation of resources and unsettled administration continue to oppress real estate sentiments in the city. The overall average capital prices across localities have not witnessed any substantial movements.

Hyderabad map

 

  • With moderate price appreciation, Hyderabad has been the only metro city in India whose capital values are yet to breach the 2008-2009 levels. Recession and political turmoil have resulted in sluggish real estate growth, which could be why the city ranks the lowest among the top metros in terms of new residential launches in the past.
  • While Banjara Hills and Jubilee Hills recorded an appreciation of 11 per cent to 19 per cent this quarter, Miyapur and Gachibowli witnessed negative price growth in the September ending quarter of 2014.
  • Jawaharlal Nehru Technological University (JNTU) showed the maximum dip of 16 per cent in the last one year.
  • Rental values fell overall including those of prominent localities such as Jubilee Hills, Begumpet and Hitech City.
  • Affordable property prices improved market sentiments, making Hyderabad a lucrative investment destination.
  • Telangana government’s new budget raised speculation as it is likely to provide more clarity on new initiatives and infrastructure-related developments. Real estate trends in the future will be dependent on the scope of new government policies which will be spelt out in the yet to be finalised Budget.

Hyderabad graph 1

Residential Market Analysis key influencers hyd jul to sep

  • Despite high saturation levels, Jubilee Hills saw fluctuating prices in the recent quarters. New project launches were few and prices were mostly beyond the affordable range. Proximity to Hitech City and the commercial locality, Banjara Hills added to its desirability. After a slight drop (one per cent) in prices in the last one year, the market picked up in Jul-Sep 2014 and registered a 19 per cent quarter-on-quarter increase. Improved market sentiments after prolonged recession (2008-2011) post formation of new government could have been a driver of growth.
  • Banjara Hills witnessed a consistent growth in property prices, (11 per cent quarter-on-quarter and 31 per cent year-on-year).
  • Dilsukh Nagar recorded 10 per cent growth in the quarter ending September 2014 and 22 per cent in the last year due to good connectivity via extensive road and metro network. Affordability has been another driver for growth.

“Premium localities, Jubilee Hills and Banjara Hills recorded maximum quarter-on-quarter price hike in the range of 11%-19%."

  • Lal Bahadur Nagar or L B Nagar grew by 5 per cent in the Jul-Sep 2014 quarter over the preceding quarter. Being situated on the crossroads of the main city, the new International Airport and affordable prices pushed up housing demand here.
  • Kondapur, located in the Ranga Reddy district, witnessed one per cent increment in property prices in the last quarter and 10 per cent in the last one year. Good social and civic infrastructure, proximity to IT hubs such as Gachibowli and Hitech City and seamless intracity connectivity were the major factors driving price movements in the locality.
  • Miyapur witnessed a 7 per cent decline in prices in the Jul-Sep 2014 quarter due to over-supply of residential properties. However, the locality continues to grow positively year-on-year (having registered a 6 per cent annual growth) as it is an industrial hub and boasts of good infrastructure and connectivity. The upcoming Hyderabad Metro Rail also put it high on the investor’s list.
  • Kukatpally boasts of an assortment of residential options for all pockets as well as proximity to Hafeezpet, Kothaguda, Hitech City and Madhapur. The commercial pockets had also added to the locality’s demand (Kukatpally is one of the best known shopping districts of Hyderabad). However, price trends for the region have been marginally negative in the recent past owing to improper garbage disposal and acute water shortage.

“Hyderabad saw several new launches and awaits possession of numerous under-construction projects by 2015. Experts anticipate price rise.”

  • Chandanagar offers affordable properties and proximity to IT hubs such as Gachibowli, Kondapur, Madhapur and Hitech City. However, it witnessed a 2 per cent decline in the Jul-Sep 2014 quarter compared to the quarter preceding that. High population levels leading to congestion, traffic jams and frequent power cuts have been some of the dampeners.
  • Capital rates in Gachibowli witnessed a 19 per cent increase in the last one year although there was a marginal drop of one per cent in the last quarter) owing to presence of IT companies such as Microsoft, Infosys and Wipro and the locality’s proximity to Hitech City. Prominent educational institutions such as the Indian School of Business, Urdu University and University of Hyderabad have added to demand for housing here.
  • Madhapur saw a marginal dip of one per cent this quarter as compared to the preceding quarter of 2014. Its annual growth for the September ending quarter compared to the same last year is to the tune of 11 per cent. Numerous residential and commercial pockets have sprung up in the area in last two decades. The locality’s proximity to the technical (Hitech City) and financial (Manikonda) districts of Hyderabad have been major growth drivers, although civic infra has not kept up, resulting in paucity of drinking water. The upcoming metro connectivity by 2015 is likely to further boost housing demand here.

Hyderabad table-capital values

Hyderabad table 2

Rental Analysis

  • Rental values in Madhapur rose by 15 per cent, i.e. from Rs 13 per sq ft in Jul-Sep 2013 to Rs 15 per sq ft in 2014. Affordability and easy connectivity to Hitech City and Manikonda have been primarily responsible for the uptake.
  • Rentals in localities such as Kondapur, Banjara Hills and Miyapur have been static at Rs 12 per sq ft, Rs 15 per sq ft and Rs 9 per sq ft, respectively since Jul-Sep 2013, owing to static demand.
  • Jubilee Hills has witnessed the maximum decline of 13 per cent in rental values over the last one year. Availability of high-end luxury residences for rent in upcoming localities at significantly less prices has been one of the primary reasons for shifting demand.
  • Hitech City too witnessed a 7 per cent decline owing to significantly higher rental values as compared to neighbouring localities such as Madhapur and locality saturation.

Copyright 99acres.com


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