Introduction
Telangana’s capital, Hyderabad, has seen a dramatic rebound in property prices recently. The city’s strong real estate structure, IT hub, and government initiatives support the city’s strong recovery from the shutdown of activities due to the lockdown.
Table of Contents
- Hyderabad Real Estate Market Overview
- Sales of Residential Projects Increased by 47%
- Office Real Estate
- Residential Real Estate
- Hub and Spoke Model
- Development of Urban Infrastructure
Hyderabad real estate market is expanding steadily. The demand for residential and commercial buildings has increased tremendously. The state government’s efforts to improve infrastructure and increase connectivity have helped the real estate industry. The city has become home to many important IT companies. It attracts a huge number of employed professionals.
In the last five years, average property prices in Hyderabad have been increasing by a maximum of 10% every year. However, it remains one of the cheapest cities in India to buy real estate. Real estate reports from prominent global real consultancies such as JLL and Knight Frank indicate growth in market size. Let us take a look at the overview of the market where we have seen the turbulent graphs of the last two years.
Hyderabad Real Estate Market Overview
Hyderabad’s commercial market has seen impressive growth in 2019 despite a nationwide economic slowdown, a six-quarter decline in GDP, the longest spell in its 23-year history. Amid tough times, the office space sector scaled up with a supply of 13.2 million sq. ft.
10 million square feet has the highest net occupancy. Hi-Tech City and Gachibowli contributed to the absorption of these office spaces. The annual supply is double the five-year average supply. It demonstrated the potential of the city markets. The expansion of tech giants like Facebook, Microsoft, and Intel has boosted demand.
IT-ITeS occupiers continue to be the primary demand for office space in Hyderabad. Accounted for 39% of the total leasing. Manufacturing and industrial occupiers have gained market share. Has a market share of 22%. Co-working providers account for 21% of the office leasing market.
Sales of Residential Projects Increased by 47%
The residential market is no less, with newly launched projects and a successful sales history, the year was marked by positive market trends. Project launches grew by 63% year-on-year. However, sales registered a 47% year-on-year increase. A 21% annual growth in sales was observed with a 16% decline in unsold inventory.
Hyderabad Real Estate Market in 2024
Due to the lockdown, Hyderabad, like all cities, has come to a standstill in terms of transactions and construction of projects. But the city bounced back with sales recording positive growth. The city accounted for 30% of office spaces by the end of the first half of 2020.
Hyderabad has a significant share of office space absorption in the country. The city has the lowest unsold inventory among the country’s leading city markets. This is a testament to the strong sales going on in the city.
Office Real Estate
Hyderabad added 8.2 million sq ft of new office space in H1FY23. It is the city’s largest new office supply in the past six years. The city accounts for 34% of new office space among the top 7 Indian real estate markets.
In terms of net office absorption, Hyderabad has the second largest (21% share) in the country with 4.03 Mn sf in H1FY23. The city saw the largest YoY growth in net office space absorption at 152%. In H1FY23, the average citywide office rent was INR 61/sf/Mo. Office vacancy levels increased by 0.7% to 15.9% in H1FY23 due to new office space coming into the city.
Residential Real Estate
According to Knight Frank India’s most recent estimate, home sales registered a 3% year-on-year decline in February. However, registration revenue collections fell by 1% year-on-year. In February 2023, 5,274 residential property units were registered in Hyderabad. The total value of assets listed during the month stood at Rs 2,816 crore.
Registrations of residential units priced between 2.5 and 5 million (Rs 25 and 50 lakh) continued to be most common. It accounted for 51% of the total registrations in February 2023. In February 2023, only Rs. 2.5 million (Rs 25 lakh) tickets have a demand rate of 18%. There is no change compared to last year.
The Hyderabad residential market is divided into four districts:
- Hyderabad
- Medchal-Malkajigiri
- Rangareddy
- Sangareddy
Hub and Spoke Model
It is a business model that is useful for the decentralization of businesses. Look East policy and increase in outreach are some of the government initiatives brought in to support this model. This led to the expansion of the IT sector rather than being concentrated in certain areas of the city. It hinders the development of other parts of the city.
Development of Urban Infrastructure
Urban infrastructure needs to be developed for industries to expand and expand. For example, necessary infrastructure such as uninterrupted power supply and adequate data connection should be provided. Hence infrastructure development in border areas influences IT companies to relocate to other parts of the city.
Conclusion
As the IT hub in Hyderabad is getting stronger every year, land prices are increasing due to working professionals. Other sectors such as automobiles, pharmaceuticals, and retail are equally developing. This leads to an increase in land prices. For more information, visit openplot.
Also read: Hyderabad Real Estate Buying: Top 5 Best Places to Buy a House