According to a recent analysis by Knight Frank India, Hyderabad's real estate market has seen a considerable upheaval. According to the most recent research, "India Real Estate - office and Residential Market - Jul-Sep - 2023," a tendency that has been growing since 2018 is revealed. Affordable housing, which was once the steadfast cornerstone of Hyderabad's real estate, has now reached its lowest point.

During the third quarter of 2023, which runs from July to September, sales of affordable houses in the city saw a steep fall. hyderabad earned the fewest sales in the sub-5 million market among India's other seven big cities, with a startling YoY sales decline of 44%. Although Hyderabad's real estate market as a whole has expanded by 5%, a sizeable number of its sales—exactly 52%—now lie in the luxury category. The price levels have increased by 11% YoY as a result of the trend towards luxury residences, with an average price per square foot of Rs 5,518.

According to Knight Frank, the impact of price rises and interest rate increases has been significant, resulting in a startling 14% increase in effective EMI and a 7% increase in down payment. Due to this, middle-class people are finding it more and harder to fulfil their goals of becoming homeowners. According to figures from Q3 2023, 52% of residential transactions in hyderabad currently have a ticket size of $10 million or more, leaving only 9% for properties priced below $5 million.

In response to this change, Shishir Baijal, Chairman and Managing director of Knight Frank India, stated: "Residential sales continue to gather pace, reaching multi-year highs. Despite the fact that inventories have significantly increased as a result of developers starting new projects to meet this great demand, the market's overall health is improving due to strong sales velocity. Higher loan rates and property prices haven't had much of an effect on homebuyers with larger down payments, but the affordable sector has been negatively impacted, needing more actions to boost demand and improve development viability.

While we are pleased with the expansion of the residential market overall, there are some worries, particularly in the inexpensive category, which had a consistent fall in Q3 2023. Lower-income customers have been impacted by recent economic turmoil, which has had an impact on rural spending and the lower end of passenger car sales. Because it has historically been the largest buying category and is essential to the long-term expansion of the business, the drop in the affordable housing segment is alarming. Long-term harm to the real estate industry might result from a prolonged slump. Therefore, stakeholders need to reevaluate their plans for reviving and maintaining the cheap sector.

Hyderabad has garnered attention for its outstanding achievements in the commercial real estate industry amid these upheavals. With 2.9 million square feet of office space deals in Q3 2023, the city had the largest number of new office completions nationwide. Throughout the quarter, Hyderabad's average transacted rent remained constant at Rs 65.3 per square foot per month. In Q3 2023, Global Capabilities Centres transacted 75% of the entire office space area, with flex office spaces accounting for 13% of the overall volume.

Ticket-Size Split of Sales in Hyderabad’s Real Estate Market (Q3 2023):

– <5 million: 749 units
– 5-10 million: 3,247 units
– 10 million and above: 4,329 units
– Total: 8,325 units

Year-on-Year Percentage Change:
– <5 million: -44%
– 5-10 million: -2%
– 10 millionand above: 34%
– Total Sales Growth: 5%

Source: Knight Frank India
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SIBY JEYYA

05/10/2023 06:44 AM