Competitive property prices, robust infrastructure growth, and supportive government policies have positioned Hyderabad as one of the most active residential markets in recent times. Would the good times roll in next year as well?
“The strong fundamentals and consumer demographics of Hyderabad will help aid the revival of its real estate market in 2021. Affordability will be a key driving force of growing demand. The buying cycle in Hyderabad is already approaching pre-Covid levels. The market is expected to surpass the pre-covid performance by the first quarter of 2021. Overall, there will be high demand for developers with minimal execution risk, and property prices will continue to appreciate,” believes Rakesh Reddy, Director, Aparna Constructions & Estates.
Crunching numbers
According to RoofandFloor, about 700 properties entered Hyderabad’s market in 2020. Out of the total new supply, properties in the affordable (less than Rs 40 Lakh), mid-segment (Rs 40-70 Lakh), and ultra-luxury (Rs 1 Crore and above) segments recorded equal share with 27% each. Properties in the luxury segment (Rs 70 Lakh-1 Crore) recorded 20% supply.
So, where did the maximum activity happen? The launches were concentrated in the Kondapur, Hafeezpet, and Manikonda regions. The northern suburbs of Kompally also saw an increase in launch activity.
In terms of BHK configurations, “3BHK were most popular configuration with maximum sales. The prevailing Covid-19 pandemic has changed the way consumers approach buying real estate. As remote working becomes the norm, homebuyers are looking for larger spaces,” added Rakesh.
Localities to watch out for in 2021
While Western Hyderabad has witnessed the bulk of commercial development so far, the focus is now shifting to the eastern part of the city. Markets including Uppal, Pocharam, and Ghatkesa are expected to see good development in the times to come.
Unsold inventory
At 33,000 units, Hyderabad had the lowest level of unsold inventory at the end of September 2020 compared to housing markets in other major cities. The city contributed only 4.6% to the national unsold inventory across eight metros. The festive season witnessed a further reduction in unsold inventory.
It will take 18-24 months to clear the unsold inventory as Hyderabad continues to show resilience and strong momentum against downturns.
Key trends for 2021
- Increased demand for gated communities: High-rise gated communities have been steadily gaining interest from homebuyers and investors alike. These gated communities offer access to modern amenities in addition to security, property maintenance, and eco-friendliness. As remote working becomes the norm, homebuyers are opting for well-equipped projects with dedicated home offices including 24-hour uninterrupted power and smart connectivity as well as easy access recreational activities.
- More focus on East Hyderabad: While Western Hyderabad has witnessed the bulk of commercial development so far, the focus is now shifting to East Hyderabad. To balance the city’s commercial infrastructure growth, the Telangana state government has recently proposed the concept of “Look East,” which will develop a new IT corridor in the eastern part of Hyderabad including Uppal, Pocharam, Ghatkesar and Sagar Highways.
The goal is to convert the eastern quadrant of Hyderabad into an IT hub at par with the western IT hubs of the city. This development will spur residential real estate growth in east Hyderabad in 2021.
- Increased demand for flex space: Hyderabad hosts 4.5 million sq. ft. of the total flex space stock in India and is one among the fastest-growing markets in the country, according to a recent report by JLL. The demand for flexible spaces in large cities such as Hyderabad is likely to grow, with businesses having a greater need to accommodate portfolio expansion and contraction along with crisis support. This indicates the inherent growth potential of the flex office market in India, it said.
“Flex space operators provided organised workspaces with a lock-in-period of 1-2 years. Companies that have pre-leased with scheduled delivery over the next 1-2 years have shown interest in such flex spaces to have their temporary offices. Apart from big MNCs, Hyderabad also houses many start-ups and small companies in the field of Consulting, IT, and logistics. Flex spaces have become financially feasible for such small players as well with low capex,” said Sandip Patnaik, Managing Director and Head (Telangana & Andhra Pradesh), JLL India.
The way forward
The real estate sector has reinvented itself numerous times amidst previous economic slowdowns, and it must do so again in the post-Covid world. To regain its previous growth trajectory, the sector will have to:
- Accelerate the adoption of technology to increase efficiency and mitigate risk
- Use modular construction, such as Mivan technology and other formwork systems
- Use of automation, artificial intelligence, and big data
“It is important that the government lays the groundwork to provide a strong impetus for growth moving forward. Regulatory reforms such as relaxation in FDI will encourage more investment in the sector. This will lead to steady demand generated through urbanisation, rising household incomes and the incentivisation of affordable housing,” concludes Rakesh.
Thanks for sharing this Blog. I grab the more information From your Blog.Now the Real Estate in Hyderabad is Fastly growing and some areas are developing very good Some of the Developing Areas are present in the east side they are Uppal, Pocharam, and Ghatkesa are expected to see good development in real estate.