Surging Demand for Luxury Housing in Hyderabad Sparks Price Spike

Hyderabad: Amidst the backdrop of a continually optimistic real estate market in Hyderabad, there has been a notable surge in the desire for luxury housing within the city and its suburbs in recent years.

Out of the seven prominent cities, Hyderabad has demonstrated the most substantial leap, with a remarkable 42 percent increase in the average price of luxury homes over the past five years. Starting from around Rs. 7,450 per square foot in 2018, the prices have escalated to approximately Rs. 10,580 per square foot in the first half of 2023. The analysis conducted by Anarock revealed that Bengaluru and the Mumbai Metropolitan Region (MMR) closely followed with a 27 percent surge in average prices within the same budget segment.

Undoubtedly, the pandemic has acted as an unexpected catalyst for the formerly lackluster luxury homes segment, witnessing a manifold increase in sales and new supply. Inevitably, the surge in demand has led to a corresponding rise in prices, a phenomenon highlighted in the Anarock report.

Scrutinizing the average price trends across different budget segments within the top seven cities, data from Anarock Research disclosed that luxury homes have experienced the most substantial average price appreciation, clocking in at 24 percent over the past five years.

In 2018, luxury homes in the top seven cities carried an average price tag of roughly Rs. 12,400 per square foot. Fast forward to 2023, and the prices have elevated to around Rs. 15,350 per square foot.

Affordable homes, priced below Rs. 40 lakh, exhibited a more modest price appreciation of 15 percent over the same period. The average price in this category across the top seven cities stood at Rs. 3,750 per square foot in 2018, which has now risen to an average of Rs. 4,310 per square foot. Budget homes in Hyderabad secured the second-highest price appreciation, marking a 16 percent increase during this timeframe, climbing from Rs. 3,460 per square foot in 2018 to Rs. 4,000 per square foot in the first half of 2023.

Anuj Puri, the Chairman of Anarock Group, observed, “The remarkably robust sales, complemented by a strong supply pipeline, have resulted in luxury homes witnessing the most significant price appreciation.” Conversely, the affordable segment, which was riding high before the onset of Covid-19, experienced a decline in sales, inevitably impacting its average price growth. Puri further stated, “Homes in the mid and premium segments, priced between Rs. 80 lakh to Rs. 1.50 crore, collectively saw an average price increase of approximately 18 percent across the top seven cities during this period.”

Puri went on to note, “Hyderabad’s real estate performance has already been impressive on various fronts, and the evident appetite for luxury housing reinforces this position. The city’s achievement of the highest price appreciation, standing at 23 percent in this budget category, is a testament to its standout performance.”

In essence, the landscape of Hyderabad’s real estate is witnessing a dynamic shift, driven by an amplified demand for luxury housing, leading to a notable surge in prices as the city continues to establish itself as a prominent player in the real estate sector.