Hyderabad realty heading towards recovery

City tops charts in terms of increase in housing launches, price increment and other parameters pan-India quarter-on-quarter

By   |  Published: 23rd Oct 2020  11:43 pm
Despite the spiralling Covid-19 pressures across India, Hyderabad housing sector made a comeback in the third quarter of 2020.

Hyderabad: Hyderabad real estate is showing tangible signs of recovery across asset classes. There has been a marked improvement quarter-on-quarter with new supply and sales showing growth trends, higher than many top cities across the country. The city will remain among the top three real estate markets pan-India, say industry experts.

Despite the spiralling Covid-19 pressures across India, Hyderabad housing sector made a comeback in the third quarter of 2020 with new housing launches jumping 45 per cent compared to the pre-Covid-19 levels (Q1 2020), recording highest growth in the country.

Housing sales

The city saw an addition of about 4,900 housing units in the third quarter of 2020 (July-September) with about 88 per cent new supply having been added in the sub-Rs 80 lakh price bracket, according to Anuj Puri, chairman, Anarock Property Consultants.

Hyderabad witnessed a sale of 1,650 units in Q3 2020 compared to 2,680 units in Q1 2020 with sales returning to 62 per cent of the pre-Covid levels. Latest studies also show that low unsold inventory in the city coupled with improving sales over the second quarter of 2020 allowed top property developers to hold base prices of the residential units intact.

Estimates show that the city witnessed housing sales worth over Rs 3,100 crore in the nine months of 2020 (January-September). The overall units sold in the three quarters is approximately 4,980 units. Residential market witnessed the highest price increment of 4 per cent in the third quarter of 2020 followed by Bengaluru with 3 per cent year-on-year (YoY). The city saw a total new residential supply of over 1.16 lakh units between 2013 and Q3 2020.
“Hyderabad sales values went up by 152 per cent from Rs 410 crore in the second quarter to nearly Rs 1,032 crore in Q3 2020,” added Puri.

Anarock expects a 20-24 per cent jump in housing sales in Q4 2020 against the preceding quarter.

Hyderabad dominated new launches in the country contributing for over 40 per cent of the overall launches across all top seven cities during Q3 2020, according to JLL Research. The city witnessed the highest number of new launches in Q3 in the country with 5,396 units compared to 5,034 units in Q2, registering a seven per cent growth.

Sharing the current scenario, Sesha Sai, MD, Hyderabad, Savills India, said, “Hyderabad remains a very good market for residential buyers. Developers will see faster recovery in the city that will aid them to re-strategise their expansion plans on where to invest and when.”

Look East Policy

Experts emphasise Telangana’s Look East Policy which aims to encourage real estate development in the eastern side of the city will ensure equitable growth as the government is keen to incentivise the investors. Connectivity, social infrastructure and talent availability can drive the entire ecosystem of the city. The recently introduced TS-bPASS initiative of the government will act as a further boost.

Hyderabad, which has seen a lot of momentum in the co-working and managed workspaces in the recent years is not only attracting new companies but also enabling growth of the companies that have already established their base in the city. Awfis for instance is expanding its footprint in the city with plans to more than double its operations. The company currently operates six co-working space centres in Hyderabad with 5,000 seats with its facilities spread across the city.

Awfis founder & CEO Amit Ramani said, “We are currently adding three new centres in Hyderabad adding 1,500-2,000 seat capacity, which will take the total to 6,500-7,000 seats. We plan to have about 15 centres in the city in the coming years as we see the potential to double our capacities here.”

Office spaces in demand

Knight Frank research shows the recovery in office transactions and new completions helped rental values in Hyderabad increase by 2 per cent YoY in Q3 2020. The city saw office transactions at 5,00,000 sq ft during the third quarter.

Hyderabad accounted for close to 12 per cent of office space transactions in India during the first half (H1) of 2020. Driven by the dominating IT industry, the services sector continued to drive office space take-up with 53 per cent share. The H1 of 2020 witnessed leasing activity to the tune of 1.7 million sq ft. By the end of the first half of 2020, the total office stock in the city stood at around 61 million sq ft.

Sesha Sai, MD, Hyderabad, Savills India, said, “The demand for office spaces for medium-term is expected to rebound faster than they have dropped. Hyderabad will be the biggest beneficiary when the tide turns, as companies will look for talent, enabling environment and good quality supply of real estate, all of which are available in the city.”


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