Realty Decoded Q4 FY16: Hyderabad In The Sweet Spot Of A Real Estate Revival

The success of a market in any sector lies not only in reaching the top of the pecking order in one quarter, but also its ability to stay on top consistently over a period of time. The resilience shown by the real estate market in Hyderabad, the capital of Telangana, amid a largely downbeat business climate, seems to exemplify consistent success – both in terms of price increase and sales.

The city, which had in the October-December quarter seen the second-highest year-on-year rise in property prices – next only to Bengaluru – jumped a notch in January-March to be the city with the highest price appreciation, shows PropTiger DataLabs' 'Realty Decoded' report for Q4, FY16.

Price appreciation

According to the report, real estate prices in Hyderabad grew six per cent in January-March over the same quarter a year earlier – at the highest rate among the top nine real estate markets covered by the report. Also, the city has seen a 15 per cent price increase over the past 12 quarters.

The report takes into account the housing markets in nine major cities – Ahmedabad, Bengaluru, Chennai, Gurgaon (including Bhiwadi, Dharuhera and Sohna) , Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane) , Noida (including Greater Noida and Yamuna Expressway) , and Pune.

Sales growth

With five per cent year-on-year sales growth in January-March, Hyderabad was the only city to show an uptrend in sales during the quarter. The other eight cities saw price declines to the tune of four to 44 per cent.

Affordable housing & inventory

The DataLabs report indicates that demand for affordable housing units (those priced between Rs 25 lakh and Rs 50 lakh) drove the overall demand for real estate across India. In Hyderabad, 30 per cent of the total unsold inventory was in the affordable housing segment. Also, Hyderabad, along with Ahmedabad and Chennai, accounted for 45 per cent of the total unsold inventory in the ready-to-move-in segment.

Overall, given a surge in sales and limited new launches in Q4, Hyderabad and Bengaluru saw their total unsold inventory coming down. Both new launches and inventory had been higher in the previous quarter.

Growth drivers & the way forward

For a city that had been in the middle of a political strife for several years, the exceptional growth in its real estate is driven mainly by new infrastructural development, especially with a stable government at the helm of affairs. Projects like the Hyderabad-Nagpur Industrial Corridor, Information Technology Investment Region and Outer Ring Road are seen giving the city's real estate a major push.

Besides, several recent reports on the sector show buyers' interest shifting from the metros to comparatively small cities. With more and more people migrating to the city to join the information technology workforce, the construction activity here is set to go up, keeping Hyderabad real estate in the pink of health. A workforce aspiring to have all the benefits of a metropolitan life without its chaos and heavy price tag is set to give properties for sale in Hyderabad an obvious upside.

The DataLabs report shows that 99 per cent of the total demand for properties in Hyderabad is from end-users. This could further boost construction activity and timely delivery of units in the city in the quarters to come. As far as buyers are concerned, this may be the best time to invest in Hyderabad.

To down load PropTiger DataLabas' Realty Decoded Q4, FY16 report, click here. 

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