Hyderabad housing prices rise 8% in Q1

Hyderabad: Overall housing prices in Hyderabad increased 8 per cent year-on-year (YoY) in April-June quarter (Q1) of financial year 2022-23, as per a report. All submarkets except Hyderabad central saw an increase in prices during the quarter. However, the prices in the city residential market rose only 1 per cent quarter-on-quarter. The average property price stood at Rs 9,218 per sft in Q1 of FY23.

Unsold inventory rose 55 per cent YoY as the city saw a spurt in launches over the last few months. About 96 per cent of the unsold units are under construction. Despite the unsold inventory, the city has seen resilient demand during the pandemic led by employees in the technology sector. As a result of the demand and new launches, prices in Southwest grew the highest at 15 per cent YoY.

Realtors' apex body Credai, real estate consultant Colliers India and data analytic firm Liases Foras have come out with 'Housing Price-Tracker Report 2022' for eight major cities - Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad. According to it, the housing rates on an average surged up 5 per cent across these cities during Q1 of FY23.

Revival in housing demand and rise in construction cost are the main reasons that led the residential property prices to surpass the pre-pandemic levels. As per the data, Delhi-NCR saw the maximum rise in housing prices at 10 per cent y-o-y to Rs 7,434 per sft, while Ahmedabad rose 9 per cent y-o-y to Rs 5,927 per sft and Kolkata too increased 8 per cent to Rs 6,362 per sft during the reviewed quarter.

Pune reported a 5 per cent rise in housing prices to Rs 7,681 per sft, Bengaluru saw a 4 per cent price appreciation to Rs 7,848 per sft, whereas Chennai witnessed only one per cent increase to Rs 7,129 per sft. MMR, the costliest real estate market, saw only a 1 per cent rise in housing prices at Rs 19,677 per sft. The prices are based on carpet area.

Pankaj Kapoor, Managing Director of Liases Foras, said that prices would remain range bound. "With discounted EMI schemes, we see early signs of developers absorbing the impact of increasing interest rates. Sales volumes are likely to improve as we see growing new supply with festive offers," Kapoor said. Credai National President Harsh Vardhan Patodia attributed the rise in housing prices to a hike in rates of key building materials as well as labour wages, besides some strong fundamentals. He said there could be a marginal impact on demand due to a hike in interest rates on home loans but sales would continue to grow from September onwards. Colliers India Chief Executive Officer Ramesh Nair said the upcoming festive season is likely to keep the market sentiment high, resulting in higher sales despite the hike in interest rates. In Delhi-NCR, the report said that Golf course road in Gurugram saw the highest year-on-year price rise of 21 per cent followed by Noida Expressway.

Prices in Central Chennai witnessed the steepest decline of about 13 per cent y-o-y whereas West Poonamallee saw the highest rise of 13 per cent. Kolkata southwest and Howrah saw the highest surge in prices with a 13 per cent rise. In the MMR market, Western suburbs (beyond Dahisar) saw the highest increase in prices at 12 per cent year-on-year. Kothrud and Baner in the Pune market logged the maximum surge in housing prices at around 9-10 per cent range, the report said.

"Housing prices did not rise much in the last one decade. Builders have been operating at a very thin margin. With the rise in prices of key building materials, real estate developers have no option but to pass on the burden to customers. However, large and credible players are witnessing better demand than others, so they are commanding a premium in the market," said Pankaj Pal, Group Executive Director of AIPL.