Hyderabad, the capital of Telangana, has emerged as a hub for manufacturing industries due to its strategic position in south-central India in the early 1900s. By the early 2000s, the manufacturing sector here was superseded by the service sector, especially the IT industry, after HITEC City (Hyderabad Information Technology and Engineering Consultancy City) – an IT and financial business district located in west Hyderabad, was developed in 1996. The city witnessed an economic boom and an influx of investments driven by the IT industry since the 2000s. However, the pace slowed down during 2008, owing to the global financial crisis and the political instability in the region due to bifurcation of the then state of Andhra Pradesh.
The formation of the Telangana state reinstated political stability in 2014 and its pro-development and business-friendly policies brought Hyderabad back on the radar of global companies and investors. The Telangana State Industrial Infrastructure Corporation Limited (TSIICL) was established in 2014 for developing physical and social infrastructure in industrial areas and potential growth centres. Also, the TS-iPass is in place, which offers single-window clearance and simplified procedures to establish industries in Telangana. The city has attracted nearly USD 12 billion private equity since 2000 and has received 51 percent of these investments between 2014 and 2020 alone.
The real estate development set in motion by the growing population due to a robust IT industry has resulted in the growth of the residential real estate market in recent years especially in the west of Hyderabad, where most of the commercial spaces are concentrated.
The latest property market trends in the city suggest the following:
- New residential supply in the city registered a triple-digit growth of 122 per cent YoY, with 27,435 units launched in Q3 2022.
- Maximum (59 per cent) new units launched in the July-September quarter belonged to more than the INR 1 crore price bracket. The majority of the new projects were launched in locales, such as Kukatpally, Bachupally and Kompally, and along Outer Ring Road in Gundlapochampally and Narsingi.
- Residential sales reached an all-time high, with 10,574 units sold in Q3 2022. The demand grew by 35 per cent YoY in July-September 2022 quarter as compared to the same period the previous year.
- The western micro-markets continue to lead the residential sales, with micro-markets, such as Kollur, Gundlapochampally, Ameenpur, Puppalaguda and Kompally, witnessing maximum traction in the third quarter of 2022.
- The majority of demand (45 per cent) was concentrated in the more than the INR 1 crore price bracket) in Q3 2022. Homebuyers in Hyderabad preferred apartments with a 3BHK configuration, which took a share of 50 per cent of the total demand pie.
- Prices for new supply and inventory in Hyderabad grew by 5 per cent YoY in Q3 2022. Currently, Hyderabad has the second-highest property prices (INR 6,100-6,300 per square foot) after Mumbai amongst the top eight cities.
- The combination of a strong influx of supply and relatively slower sales velocity continues to push the unsold inventory levels, which stood at 99,087 units at the end of Q3 2022, registering a 98 per cent YoY growth - the highest amongst the top eight cities. At the current sales velocity, it would take 41 months to offload the existing unsold stock compared to 25 months at the end of Q3 2021.
Renuka Kulkarni, a seasoned real estate professional, brings over five years of diverse experience in research, consulting, and architectural design within the urban sector. Her expertise spans public and private projects, showcasing proficiency in real estate research, trend interpretation, and policy analysis. With qualifications in architecture and a master’s degree in Data Science (Business Intelligence & Data Analytics) from IIIT Bengaluru, along with an M. Tech in Urban Development and Management from TERI School of Advanced Studies, New Delhi, Renuka seamlessly blends data analytics with market insights, offering a holistic understanding of the industry in her research pieces.
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