The IT stronghold recently faced the lowest level of unsold inventory across the eight prime residential markets. Hyderabad’s residential market has witnessed a humble improvement in the preceding months of Q1 (May-June) 2020-21 after being hit with a rough patch in April.
Gachibowli, Narsingi, Kokapet, Patancheru, and Bachupally are the localities bordering IT corridors accounted for about 70 percent of the property enquiries and transactions. As per the recent report by 99acres.com, bigger residential formats including 3 BHK units priced within Rs 50-70lakh budget and independent houses settled in the bracket of Rs (80lakh-1crore) remained the focus segments.
In the west, Nizampet too attracted significant traction from the community of homebuyers. The market demand was apparently driven by residential stock, in proximity to the Outer Ring Road which was not just favorable to the budget limit but also settled around Rs 3800 per sft. Kondapur and Nagole also recorded 3 percent of growth in the capital prices on a quarterly basis.
Due to the proximity to HITEC City, the average prices in Kondapur had a good boost. Moreover, the Nagole in the east too gained its good share of popularity due to the metro connectivity via blue line and availability of low-cost units. Gachibowli, Kondapur, Manikonda, and Kukatpally reportedly possess the maximum amount of unsold stock.
Average rentals in Hyderabad have been increased marginally by one percent every year. HITEC City, Banjara Hills, and Attapur continued to enjoy popularity among tenants and recorded a 5-6 percent hike in their average yearly rents. The proximity to Gachibowli indeed fueled the demands in Attapur. The Banjara hills, their premium locales, and HITEC City gained significant priority due to their ever-increasing commercial significance and the presence of IT firms.
Notable Price Growth:
Coronavirus Pandemic indeed had an adverse effect on housing sales and new supply. As per the reports of PropTiger, in Hyderabad, the cost of the property has continued to skyrocket during the period of April-June in 2020. During this period, builders still managed to sell 1099 homes. Due to the higher pricing over the years, more than 80% of new launches were priced at around 1 crore with 2BHK/3BHK accounting for over 90% percent of the new supply.
Price hike in properties has been an extremely important factor in Hyderabad over the past few years. However, there has been a steep decline in demand but it's transient due to the current pandemic situation and over the upcoming quarters, it will be revived again.
In fact, Hyderabad's commercial market is doing well in the given sector over the past few years and residential demand is likely to lag the supply absorption. There are some new launches in store for us this year but volumes will not be comparable to previous years. However, prices may continue to swell although not at the same pace as over the last years, said Mani Rangrajan, Group COO, Housing.com, makaan.com & PropTiger.com.
However, as compared to most other markets around, where price growth has been stable, Hyderabad witnessed a hike of 7 percent in residential prices over the last year with weighted average prices at Rs 5505 per square ft.
Stunted Unsold Inventory
The Pharmaceutical Capital of India and an IT stronghold clearly has the most truncated levels of unsold inventory piled up across the eight prime residential markets at 32,068 units or overhang of around 19 months. Though, the inventory was clearly declined by 20 percent and demonstrated around four percent of the 7,38,336 unsold units across all eight prime residential markets.