Hyderabad’s residential growth steady
City surpasses pre-covid sales, new launches in the first quarter of 2021 driven by micro markets in western suburb
Hyderabad: The positive traction that Hyderabad has witnessed in residential sales in the second half of 2020 continued in the first quarter (January-March) of this year. Sales of the residential units in the city recorded a growth of four per cent in Q1 2021 at 3,709 units compared to 3,570 units in Q4 2020 and 23 per cent compared to 3,027 units in Q1 2020 (pre-Covid).
Hyderabad also registered a strong volume of quarterly residential launches in the first quarter of 2021, which continue to remain at levels higher than those witnessed in all the quarters of 2020, according to JLL.
With new launches concentrated in micro markets such the Kondapur, Miyapur and Nallagandla regions, Western suburbs continued to account for a majority share in new launches, followed by Northern suburbs which contributed 43 per cent to total launches in the city. The new launches jumped to 8,591 units in Q1 2021 from 2,949 units in Q1 2020 (pre-Covid).
New launches in the city’s affordable housing segment (less than Rs 50 lakh) increased significantly, accounting for 48 per cent of the total new launches during the quarter.
“Improving levels of demand, along with low inventory in ready-to-move-in projects have kept prices stable in the city. With sales expected to improve further on return to normalcy, capital values improved marginally in the prime Secondary, Eastern and Northern suburbs submarkets in the city,” said Sandip Patnaik, MD & head Telangana and Andhra Pradesh, JLL.
As the city has limited inventory in the ready-to-move-in category, homebuyers have shown interest in recently launched projects by prominent developers. Along with prominent locations adjoining IT hubs in Western suburbs, Kompally and Bachupally in the Northern suburbs have emerged as new destinations for homebuyers due to improvement in infrastructure and connectivity to the established IT hubs in the city.
Diwakar Rana, managing director, Capital Markets, Savills India, said, “The strengthening residential sales in the middle income and affordable segments is evoking more interest from offshore investors and will materialise in commitments to this sector in the coming times.”
The strong drive for commercial real estate in Hyderabad along with increased demand for the residential sector is set to attract more private equity funds going forward, Rana noted.
National trend
According to Balaji Rao, managing partner, Real Estate, Axis Asset Management Company, “Taking cues from the key trends of the pandemic experience, the residential segment is going to be the fastest to get back on its feet. With the aspiration of our citizenry – in tier 1 and tier 2 towns alike – to own bigger and better homes, the pandemic has created a strong structural trend for the country’s housing market.”
The latest Real Estate Sentiment Index, developed jointly by Knight Frank India, the Federation of Indian Chambers of Commerce and Industry (FICCI) and the National Real Estate Development Council (NAREDCO), showed, in Q1 2021, 65 per cent of the survey respondents (nationally) were of the opinion that residential launches will increase in the next six months. On the demand front, about 64 per cent believed that sales would increase in the next six months.
Due to continued work from home policies, residential sales remained strong and were further supported by low mortgage rates, State government benefits and developers offering discounts to clear unsold inventory. The continued positive performance of residential means more liquidity is likely to flow through the sector as credit funds, banks and global institutions look to deploy capital, shows Colliers International research.
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