HYDERABAD: Demand for units in the real estate market of Hyderabad maintained a growth trajectory in the last quarter despite the rate hikes and concerns about an economic slowdown. According to a report by Knight Frank, during the last quarter, 8,300 housing units were sold, which represents a 19 per cent growth on a year-over-year (YoY) basis. Additionally, in Q1 2023, a total of 10,986 new units were launched, reflecting a seven per cent YoY growth.
The residential market in Hyderabad has a diverse mix of both end-users and investors. Similar to Bengaluru, a significant portion of the end-users in Hyderabad are from the IT sector. As a result of the steady demand, there has been a YoY price appreciation of five per cent, and the current average price stands at Rs 4,997 per square foot.
During Q1 2023, a total of 79,126 new homes were sold across the top eight cities, representing a one per cent YoY increase. In general, sales volumes across most markets remained relatively stable in YoY terms. However, the Hyderabad market experienced the most significant growth, with sales increasing by 19 per cent YoY. Conversely, sales in the larger markets of Mumbai and Bengaluru slipped slightly, decreasing by six per cent and two per cent YoY, respectively.
Bengaluru experienced the most significant increase in per square foot (sq ft) prices with prices rising by seven per cent YoY, followed by Mumbai at six per cent YoY. Additionally, prices in Hyderabad and Chennai rose by five per cent YoY during the same period.
Recovery after pandemic
The report emphasised that the residential market has been steadily recovering over the past 18 months as the economy has emerged from the shadow of the pandemic. Although the revival in demand was initially sparked by low-interest rates and comparatively low residential prices, the momentum in residential sales has continued even as interest rates have risen.
The report states that in the past, homebuyers have been more inclined to acquire ready or near-ready inventory to minimise completion risk. However, the heightened demand over the past few quarters has depleted the stock of older inventory, and consumers are now increasingly willing to acquire newly launched properties at relatively lower prices. This shift in behaviour is due to the increased availability of newly launched properties and the higher level of confidence in developers’ ability to complete projects on time.