Hyderabad: When Telangana was formed, there was a lot of hue and cry over real estate and sceptics believed that the housing sector in Hyderabad would suffer a setback. However, the city has seen a real estate boom in the last few years. Be it new launches or home sales, both have seen a big change since then (…)
Updated – April 29, 2022, 11:07 PM
Hyderabad: When Telangana was formed, there was a lot of hue and cry about real estate and some believed that the housing sector in Hyderabad would suffer.
However, the city has seen a real estate boom in the last few years. Be it new launches or home sales, both have seen a major upswing since 2014 and even the recent pandemic – which disrupted all sectors and especially real estate – could not halt this growth.
From homebuyers to investors and developers, the City of Nizams has seen renewed interest from all stakeholders owing to its favourable socio-economic conditions, well-developed infrastructure, relatively affordable prices and business-friendly government. Research by Anarock shows that the real estate slowdown in neighbouring Andhra Pradesh capital Amaravati is being seen as an advantage for Hyderabad.
Analysing data from 2013, the research said that around 1.80 lakh new housing units have been launched in the last nine years and currently 62,800 units are available for sale in the primary market which are in various stages of construction. As soon as the restrictions due to Covid-19 were eased, a large number of new housing projects were launched in the city.
In 2020 and 2021 (till Q4 2021), the city saw new launches of around 72,500 units, contributing to 40 per cent of Hyderabad’s total housing supply (1.80 lakh units) over the last 9 years.
Mid-segment, premium housing
With Hyderabad being the base of many IT companies, residential demand is primarily driven by techies who primarily seek homes in the budget segment i.e. Rs 40 lakh to Rs 80 lakh. However, the need for larger spaces has also pushed developers towards the premium segment. In the last two years, the city has seen a major shift in new projects, with developers moving from the Rs 40 lakh to Rs 80 lakh category to the Rs 80 lakh to Rs 1.5 crore category in the post-Covid period.
Changing preferences
In the last few years, home buyers have been increasingly looking for ready-made homes or almost completed homes to minimise the risk of construction work.
However, with the recent policy reforms and structural changes, the market dynamics have changed, and the sector has become more favourable for home buyers. The sales numbers of the recent two quarters also clearly indicate an improvement in the demand for new launches.
Prices are rising
Average capital values in Hyderabad witnessed a growth of 23 per cent from Q1 2013 to Q4 2021. After 2016, structural changes in real estate policies, demonetisation and financial turmoil in NBFCs severely impacted the market. Average housing prices declined in Q4 2016 and remained range bound until 2019.
In Hyderabad, capital values declined by 2% in Q2 2020 and remained down until Q3 2020. However, the housing market witnessed a 4% increase in average prices over the past year (from Q4 2020 to Q4 2021).
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