Hyderabad emerges as affordable realty market among metros

The City of Pearls has emerged as the most affordable realty market among Indian metros thanks to a slew of affordable housing projects that mushroomed in the city in the aftermath of the 2008 global meltdown and the T-turmoil, according to a study done by global realty consultancy firm Knight Frank. What's more, enablers like the new GO 245 (relaxation of mandatory EWS/LIG housing norms) and upcoming projects like Hyderabad metro rail will continue to speed up the demand for realty projects in the city. "The market sentiment looks bullish for the forthcoming quarters. There has been an increase in demand in the last few months. The fact that the residential property in Hyderabad is relatively undervalued presents vast opportunity for end-users and investors alike," said the Knight Frank report. According to the report, the affordable housing segment in Hyderabad got a push after 2008 when the industry saw a significant price corrections due to slowdown in the IT industry coupled with political uncertainty over Telangana. "As a result, the weighted average capital value of the residential properties in Hyderabad is estimated to be the lowest among the metro cities," the report said. Though the residential market in the city had become stagnant in the last two quarters of 2011-12, the city has bounced back due to affordable housing and various promotional offers. The April-December 2012 period saw a number of launches by reputed developers totaling about 8,500 units and as of December 2012, around 65,000 residential units were under construction in various micro-markets of Hyderabad like Kukatpally, Madhapur, Kondapur, Gachibowli and Raidurgam. "Nearly 56% of the absorption till December 2012 has been within the Rs 5 million (Rs 50 lakh) category, followed by Rs 5-7.5 million with 32%. The clubbing together of these categories essentially denotes that the affordable and mid-end segment has been responsible for the absorption of a total 88% of the residential units booked or sold." On the pricing front too, nearly 51% of the total residential units underway fall under the Rs 5 million category, which signifies that the customers in the mid-segment are the prime demand drivers of the residential market in the city, the report states. According to Knight Frank, a major trend in Hyderabad's residential realty market is that small is now beautiful for buyers with a majority of them opting for smaller residential unit sizes as the global economic uncertainty has taken much sheen of the IT/ITeS sector. Acknowledging this trend, Chalapathi Rao, vice-president, Andhra Pradesh Real Estate Developers Association (APREDA) said that the residential realty sales had gone up in 2012. "There has been a 15% rise in sales and we expect another 5-10% rise in 2013 as well." Source (The Times of India, 22 Jan 2013) : "Hyderabad emerges as affordable realty market among metros."