Hyderabad’s housing market has seen substantial expansion, mirroring the city’s progressive spirit, as evident in its fast-changing urban landscape. The robust IT industry, fuelling a vibrant economy, has drawn professionals from across the country seeking promising job opportunities, spurring the development of residential properties across the city. With Hyderabad offering a wide selection of residential options, catering to a range of budgets and satisfying different buyer tastes, prospective homeowners have an abundance of options, spanning from modern high-rise apartments to spacious villas and secured gated communities.
A Quick Round-up of the Past Year
In 2023, Hyderabad witnessed a significant surge in residential sales, boasting an impressive 49 percent year-on-year rise, resulting from the sale of a total of 52,571 residential units within the city. Notably, Tellapur emerged as the most preferred choice amongst homebuyers, topping the property sales charts among the southern cities. However, in comparison to the exuberance exhibited in sales, new residential supply showed moderation, reflecting a slight decrease of 7 percent year-on-year, with approximately 76,819 residential units launched through 2023.
Interestingly, a significant majority, 76%, of the residential units launched were priced above INR 1 crore. This statistic suggests a notable focus on high-end properties within the market. Similarly, mirroring the launch trends, a substantial proportion, to the tune of 56% of the units sold also belonged to the more than INR 1 crore price bracket. This indicates a strong demand for premium residential offerings, highlighting the preferences of buyers towards upscale properties.
Positive Year-On-Year Demand Indicators During the Initial Quarter of 2024
Residential sales in Hyderabad surged by 40% in Q1 2024, when compared to a year earlier (Q1 2023), depicting a substantial increase in demand over the year. Occupying a 12 percent share of the total residential sales across the key eight cities of the country, this significant year-on-year growth suggests a robust market environment and strong consumer interest in purchasing residential properties.
However, when comparing Q1 2024 to the preceding quarter (Q4 2023), there was a decline of 30% in residential sales. The quarter-on-quarter decrease in sales notwithstanding, it is worth noting that such fluctuations between quarters are not uncommon in real estate markets due to various factors such as seasonal trends, economic conditions, and market dynamics.
Restraint Observed in New Supply
There was a decrease of 16% observed in the new supply of residential units in Hyderabad during Q1 2024, compared to the corresponding period in the previous year (Q1 2023). When comparing Q1 2024 to the preceding quarter (Q4 2023), the decline in new supply is steeper at 43%.
While the decline in Q1 2024 reflects a marked slowdown in the pace of new residential supply in Hyderabad, the city still occupied the third position amongst the key eight cities of the country, accounting for 15 percent share of the total new launches during the period.
Summing Up
In summary, Hyderabad's housing market has undergone significant expansion, driven by the city's progressive ethos and the robust IT sector, attracting professionals nationwide. The past year witnessed substantial growth in residential sales, indicating a thriving market, albeit with a more restrained new supply. Moving into 2024, despite a slight decline in sales from the previous quarter, the year-on-year growth in Q1 2024 remains robust, hinting at sustained momentum. However, there's been a notable slowdown in new residential supply, warranting careful observation for future market dynamics.
Looking ahead, Hyderabad's housing market appears poised for continued growth, buoyed by its dynamic economy and ongoing influx of skilled professionals. The city's ability to cater to diverse buyer preferences and budgets bodes well for future demand. Given the short-term fluctuations, developers may need to adapt to the changing landscape by aligning new supply more closely with market demand to ensure long-term sustainability.