Hyderabad, the pearl city of India, is the twin capital of both Telangana and Andhra Pradesh. It is one of the most populous agglomerates in South India. Hyderabad is fast on its way to becoming a major information and technology sector, second only to Bangalore. The city’s outlay is divided into five major zones and 18 circles. This city has contributed significantly to the growth of the Indian economy. It houses the largest number of SEZs i.e. Special Economic Zones, in the country. Major industries contributing to rising economy in the city includes manufacturing, IT sector and the tourism sector.
The IT companies and the vast multitude of industries here have led to a huge traction of people looking for homes. Industries and the government make large-scale investments every year in the construction of residential and IT campuses across the city which contributes substantially to the growth and development of the city. A major center of information technology sector in the city is HITEC (Hyderabad Information Technology Engineering Consultancy City), which has expanded to become a township of its own. It comprises various campuses, phases, residential projects, conventional centers and malls for IT professionals and their families. Hyderabad boasts great connectivity. The city is well connected to neighboring states through National Highways. The International Rajiv Gandhi Airport is 25kms to its south. The various localities are also connected by the suburban rail system known as the Multi-modal Transit System that provides comfortable and first-class commuter travel.
The residential market in Hyderabad, though stable, has witnessed a prolonged slump since 2009. The high demand for housing as well as affordable prices of property can be credited for keeping the market stable.
According to the 2013 data, there was a supply of about 40,000 units to meet the demand. Current absorption rate has, however, gone down to 28,000 units, creating a surplus and a demand-supply mismatch. Due to overcorrection, the market’s unsold inventory was at its highest, mainly due to the impact of global recession, political instability revolving around state bifurcation and the slow recovery phase.
Improved economy and rapid growth within the last six months spanning 2015-16, has improved market sentiments. Greater investment by corporates was witnessed as political environment improved.
With positive interventions from the Government to bring in investments, we expect further sharp rise in the residential realty market brought about by heightened economic activity. The launches have picked up, increasing by over 1.5 times compared to last year. The citywide numbers are expanding so rapidly, that they are expected to break the benchmark pretty soon. Capital values have witnessed an impeccable rise, which is challenging the previous high of 2008.
As the gears shifted, net absorption in 2015 touched 3.1 million sq. ft, beating all past half-yearly consumption numbers. Leasing prices for commercial projects soared from 6.8% in 2011 to 8.6% in 2015. In 2015, real estate prices went up ranging from Rs 1.5 crore for apartments in Gachibowli, the epicenter of the city, to Rs 10 crore for luxurious villas.
The residential realty market in Hyderabad is characterized by an increasing and marked preference for multi-storeyed apartments of varying price ranges.
Preferential areas for property include HITEC, Gachibowli, Kukatpally, Madhapur and Chandnagar, due to their proximity to the city’s IT hub, excellent connectivity, amazing infrastructure facilities and affordable prices. These areas have a good mix of options from affordable apartments to the expensive, luxury villas. With increasing number of local residents and reduction in vacancy levels, the rental segment has also witnessed a manifold growth, much to the relief of property owners and investors.
It can be safely said the city is on the verge of witnessing a rise in the prices of real estate. Given the good quality of life and state-of-the-art infrastructure, it will not come as a surprise to potential buyers. It is a good time to invest in the real estate market in Hyderabad, before the market value propositions take off and acquire new heights.
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