Signalling a strong comeback, residential project launches and healthy sales numbers in Hyderabad are indicative of a gradual recovery in the city’s residential real estate market. In line with the previous quarters, West Hyderabad remained the cradle bearer of this resurgence.
The Coronavirus pandemic had resulted in one of the worst slowdowns the real estate industry had ever faced. However, marking a gradual comeback, the southern city of Hyderabad is witnessing a renewed vigour in terms of new project launches and housing sales numbers. Although the Apr-Jun 2021 quarter did not witness a noteworthy number of new launches, the encouraging project launches in Q1 2021 have reinvigorated the homebuyers’ interest. This can be substantiated from the fact that housing sales in Hyderabad witnessed a significant 150 percent YoY growth during H1 of 2021 (source: Knight Frank). A closer analysis will clear the picture.
State of new launches and housing sales
According to a recent report titled ‘Indian Real Estate’ by Knight Frank, Hyderabad witnessed a 278 percent YoY increase in new housing launches during H1 2021. In the backdrop of the Coronavirus pandemic, this trend is both encouraging and reviving for the city’s real estate market.
The new project launches had a direct bearing on housings sales. The new home sales in Hyderabad registered an over 150 percent YoY growth. The number of housing sales stood at around 12,000 units in H1 2021, as compared to 4,800 units in H1 2020, when the country had undergone a strict lockdown following the first wave of COVID-19.
The trend was reiterated in the Hyderabad Insite Report Apr-Jun 2021, which states that while new project launches in Hyderabad remained meagre in Apr-Jun, the Jan-Mar 2021 quarter had witnessed the second-highest project launches across the top seven cities of India. In Q2 2021, the second wave of Coronavirus, resultant liquidity constraints and paucity of labour force played a spoilsport. While property sales also declined by 80-90 percent, it was majorly a temporary setback, with enquiries soon picking up for homes priced up to Rs 75 lakh.
Talking about the trend, Rakesh Reddy, Director, Aparna Constructions and Estates, says, “Hyderabad’s residential market has perennially witnessed higher housing demand as compared to other major cities. Hyderabad’s well-developed infrastructure combined with strong policy initiatives allow the city to continuously expand and offer affordable properties without compromising on quality. While lower property prices are always an incentive, homebuyers now also demand better facilities, such as modern amenities, open spaces, connectivity, and social infrastructure. Talking about configuration, homebyers in Hyderabad have largely had an affinity for 3 BHK units. This trend has only been amplified in the work-from-home (WFH) scenario. The only mismatch in demand and supply seems to be in the budget offering since the majority of new launches in the past year have catered to the budget range of over Rs 80 lakh and above. There, however, continues to be strong demand for premium properties as well, especially from reputed developers with minimal risk of project delays.”
Be it new project launches or a share in residential sales numbers; West Hyderabad accounted for the largest share in recent times. According to Knight Frank report, western localities, such as Kukatpally, Madhapur, Gachibowli, Kondapur, Raidurgam and Kokapet, accounted for almost 60 percent share of new project launches in H1 2021. The share of West Hyderabad in total sales, as well as new project launches, has also grown significantly over the last few years.
“Many growth corridors in Hyderabad, such as Nallagandla, Kompally, Tellapur and Patancheru, are gaining interest from home buyers for their location, connectivity and investment potential. These areas offer larger properties at more affordable rates, as well as strategic connectivity to commercial hubs. With work-from-home becoming commonplace, many professionals in the IT and Financial sectors are opting for more spacious properties to accommodate offices. Accordingly, the growth corridors in the western and northern suburbs are seeing the majority of upcoming residential projects,” says Reddy.
Conclusively, the recovery cycle started in the Hyderabad real estate market in Q1 2021 was briefly halted due to rising Coronavirus cases. However, in the bigger picture, housing sales and new project launches in H1, 2021 indicate a solid recovery in the near future. The status of vaccinations would also play a role in reviving the overall realty business in the country.