Hyderabad witnesses surge in premium real estate
HYDERABAD: Hyderabad’s real estate landscape has undergone a significant transformation, as revealed by a recent report from Knight Frank India. The report, titled “India Real Estate – Office and Residential Market – Jul-Sep – 2023,” highlights a trend that has been developing since 2018. What was once the robust foundation of Hyderabad’s real estate, affordable housing, has now reached its lowest point. During Q3 2023, covering the months of July to September, the city witnessed a sharp decline in the sales of affordable homes. Among the seven major cities in India, Hyderabad recorded the lowest sales in the sub-5 million segment, with a staggering year-on-year sales drop of 44 percent. While Hyderabad’s overall real estate market has grown by 5 percent, a significant 52 percent of sales now fall into the premium category. This shift towards premium properties has resulted in an 11 percent year-on-year increase in price levels, with an average price per square foot reaching Rs 5,518.
Knight Frank reports that the impact of price hikes and interest rate increases has been profound, leading to a 7 percent increase in down payment and a staggering 14 percent rise in effective EMI. This has made it increasingly challenging for middle-class individuals to realize their dreams of homeownership.
The statistics for Q3 2023 reveal that 52 percent of residential sales in Hyderabad now pertain to properties with a ticket size of 10 million and above, leaving only 9 percent for homes priced below the 5 million mark. Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on this transformation, stating, “Residential sales continue to gain momentum, reaching multi-year highs. Although inventory levels have significantly increased due to developers launching projects to meet this robust demand, the overall market health is improving, with strong sales velocity.
Elevated interest rates and prices have had little impact on higher-ticket-size homebuyers, but the affordable segment has been severely affected, necessitating further interventions to stimulate demand and enhance development viability.”
He added, “While we celebrate overall residential market growth, concerns arise, notably in the affordable segment, which has seen a steady decline in Q3 2023.