Homebuyers In Hyderabad Demand Bigger Homes
Affordable city Hyderabad is turning towards bigger homes. For a city that has properties priced within a pocket-friendly bracket, the demand is for homes in the average size of 1,757 square foot (sqf) as against 1,710 sqf in 2017, a recent study by Housing.com revealed. However, the supply side is a little imbalanced. In 2017, homes as big as 1,959 sqf were on the market. Between January to March 2018, size rationalisation was evident but it doesn’t seem to have helped the market dynamics because the average size of homes still stands at 1,921 sqf.
How much is Hyderabad willing to pay?
The average budget is also up when compared to what prospective homebuyers were willing to pay in 2017, that is from Rs 59 lakh to 63-65 lakh, which is the average – an increase of nearly 11 per cent while the demand in terms of space has increased by only 2.7 per cent.
The minimum budget was Rs 52.47 lakh while the upper limit in 2017 stood at Rs 75 lakh. In 2018, the minimum budget that homebuyers are reserving for a bigger buy stands at Rs 57 lakh while on the higher side, they would be willing to pay Rs 90 lakh- a sharp jump of almost 16 per cent.
Tracing the change in supply
As per data with Makaan.com, on the supply side, homes greater than 2,000 sq ft are in maximum supply in 2018. Last year, units between 1,500-2,000 sq ft were most supplied. Going forward, given that the demand is for homes with an average size of 1,757 sq ft, developers would need to utilise the opportunity to change their approach and build relevant to balance the demand and supply dynamics within the Hyderabad market.
Why Hyderabad?
Recall the big names — Apple, Amazon, Google, IKEA, Uber and more. All of these have lined up mega investment plans in the City of Nizams, Hyderabad. This vibrancy in the business market is helping open as many as one lakh new avenues for job seekers both direct and indirect. When the job market is promising, real estate sector becomes one of the primary beneficiaries. However, what needs to be considered is whether the city is ready to take on new settlers and whether the city infrastructure can take up the rising migrant workforce without compromising on livability?
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Certainly, the need to look into infrastructure is a crucial aspect now. The city's real estate market has shown signs of recovery. Data as per PropTiger.com record a pool of over 12,000 property options, over 2,300 projects are ready to move in while over 600 are under construction. Besides, such is the confidence of developers in the market that there are more than 200 projects that are soon to be launched in the city.
Those on the ground say that sentiments are positive. "It may take some more time before the volume of sales increases but it will. Inquiries have resulted into conversions in the recent past and the buyers are positive. However, the market is mostly end-user driven," says Rajovathsan Palety of India Homez.
Need for balanced development
With the promise of new jobs, the pattern of new investments as well as rental housing may be scattered. Those with higher incomes would settle on the premium markets while those living on a budget will go in for a price advantage even if they have to compromise on the location and amenities. Although this isn't an ideal scenario, it calls in for the need for a balanced development.
Bonthu Ram Mohan, Mayor of Hyderabad had previously said that he was keen on a master plan for the city. "here is no good development in the other parts of the city, like Uppal, Alwal etc. there have been imbalanced developments in the city. Government is focusing on balanced development on all sides of the city." The idea is to look into the drainage and sewage system which requires a funding of Rs 250-300 crore. The government is also looking at cleaning up the waterfront such as that of the Musi river and develop areas around it. Road infrastructure is also on the anvil. Technology to make road infra sustainable may also be part of the plan. If these get a green signal, even previously neglected parts of the city will see more takers. This will also to an extent cut down on the undue advantage any one zone has over the other while ensuring that various segments of buyers have access to better facilities.
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Some time back, the government had issued GOs and simplified building rules with a purpose of infusing transparency in the approval processes. Single window online approvals were introduced where there was minimum contact between the regulator and the developer. KT Rama Rao, Minister for IT, Industry, MAUD and NRI Affairs had announced the existing master plan would be rolled into one. Although it may have missed deadlines, its implementation could affect housing demand favourably.
"Prospective buyers rely more on the decisions taken by the government than the announcements made by the private sector (read: developers) . This is why any infrastructure development quickly reflects in the market sentiments, for example, the announcement of the metro rail. However, lag in implementation have caused uncertainties and buyers defer their purchase," says K Ram, a real estate dealer. Such lags have given rise to the number of fence sitters all of whom are waiting for others to buy.
With new jobs in the market, the settler population will increase. While most are not ready to buy at the moment, rental housing is going to grow. As such, rental values have already climbed in the city and it is for this set of people that the infrastructure needs to be relooked at.
As many as 25 Indian cities have come up with comprehensive mobility plan (CMP) including Tirupati in Andhra and Dombivili in Maharashtra other than states of Punjab, Karnataka, Rajasthan and Sikkim. These CMP's would identify major traffic and feeder corridors, land use which would then assist in urban planning. Hyderabad can take the cue and come up with a similar plan that can be integrated within the master plan. This would help prepare the city which is soon to take up a burgeoning population, thanks to employment opportunities.
Rao had also stressed on the need for diversified growth. The region around Outer Ring Road (ORR) is being envisioned as a self-sustained township. Moreover, 13 transit-oriented corridors along the ORR is also being considered. It would then be able to absorb housing and business demand which will be able to spread out.
As more number of people depend on the city for a livelihood, real estate and infrastructure need to be supportive. While the property market is affordably priced, infrastructure cannot be left to strain. If the government does take up its mission proactively, it would be easier for prospective buyers to reinstate faith in the city. After a prolonged tense environment after the political uncertainty and thereafter because of the slump in real estate market, the first signs of a recovering market are now visible. All it needs is a push from the authorities.
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