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If there’s one city that’s enjoying the glory of a flourishing property market, it’s Hyderabad. The city has stood out for having the largest percentage gain in sales and a constant price increase over the last five years. Despite the COVID-19 pandemic, end-user demand rose in Hyderabad, which saw a 39 percent year-on-year increase in house sales during the January-March period of the current calendar year. Despite a substantial increase in new supplies, the hi-tech metropolis has the shortest inventory overhang of 25 months.
Hyderabad’s residential property market, which was impacted by the state’s partition into Andhra Pradesh and Telangana, has seen continuous growth in terms of sales, launches, and price appreciation during the last few years. In the first quarter of the calendar year 2021, the trend has maintained. In this article, we will be discussing the growing residential market in Hyderabad amidst the political tussle between Telangana and Andhra Pradesh. We will be discussing the hot debate in the real estate market with regards to the loading factors.
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Residential market demand in Hyderabad
According to a recent research report by a leading real estate platform, housing sales in the IT city increased by 39% to 7,721 units in January-March this year from 5,554 homes sold in the same period the previous calendar year. Popular areas in Hyderabad West, such as Sangareddy, Bachupally, and Kompally, were mostly responsible for the increase in demand. In terms of value, builders sold properties worth Rs 8,400 crore in the first quarter of 2021, up 34% from the same period the previous year.
Pro-business state government measures have made it easier to do business, which has filtered down to the real estate market. End-user demand in key locales drove a 5% increase in housing prices from January to March 2021. The city’s average weighted price per square foot is Rs 5,713.
Several real estate platforms have embraced the online approach to sell properties. In Hyderabad, it was observed that in the first quarter of CY 2021, Kondapur, Kukatpally, Nizampet, Miyapur, and Kompally had the highest demand for property purchases. The most popular configurations were 1BHK and 2BHK, while sales were highest for 3 BHK configurations. Kondapur, Miyapur, and Kompally areas witnessed the most interest in units priced between Rs 50 lakh and Rs 1 crore. The majority of the inquiries for units under Rs 50 lakh came from Kukatpally and Nizampet.
New launches in Hyderabad’s residential market
On the supply side, new releases in Hyderabad increased by 95% to 7,604 units in the first quarter of this calendar year. The highest concentration of fresh supply was seen in the Nallagandla and Kompally areas. In January-March 2021, over 49% of new supply was focused in the price range of more than Rs 75 lakh. The units priced between Rs 45 lakh and Rs 75 lakh accounted for 40% of all launches. The proportion of apartments with two bedrooms has climbed to 48% in Q1 2021, up from 28% in the same quarter the previous year.
Hyderabad’s primary home market did exceptionally well in the first quarter of the 2021 calendar year, outperforming pre-COVID sales numbers. Following a significant setback in the April-June 2020 quarter, housing sales rebounded thanks to pent-up and festival demand, low lending rates, and steady pricing. Between July of last year and March of this year, sales were very strong, particularly among trusted developers.
However, due to the second wave of the epidemic, demand has dropped since April. Although it is too early to estimate the second wave’s negative impact, it has undoubtedly slowed the recovery of home demand. According to industry analysts, the real estate business is better equipped this time to deal with the scenario.
Unsold inventories in Hyderabad residential market
The city’s unsold housing stock increased by 26% year over year to 39,191 units, owing to a surge in new supply. The increase in the number of unsold housing units is not a cause for alarm, given the present sales pace. Hyderabad has the shortest inventory overhang among the eight major cities in the country, at 25 months, implying that it will take builders less than two years to sell all of the unsold units. The average inventory overhang for all eight cities is roughly four years, ranging between three and five years for all cities except Hyderabad.
Loading factor
The area that comprises the proportionate share of the common area for a flat, which is obtained by multiplying the carpet area, is known as the loading factor. When determining the loading factor, most builders consider the space around stairwells and elevators to be common areas. As a result, when the loading factor is paired with the carpet area, the super built-up area of a flat is calculated.
For example, if a builder uses a loading factor of 1.25, it signifies that the carpet area of the flat has been increased by 25%. If a flat’s carpet size is 500 square feet, the super built-up area can be computed as follows: 500 sq. ft. + 500 x 25% = 625 sq. ft.
It is mostly used by builders to recoup the costs of the project’s facilities and amenities. Lifts, lobby, maintenance room, parking, and terrace are just a few examples. The amenities of a project are directly linked to the loading factor. As a result, the expense of the developer’s additional premium amenities is frequently passed on to the customers in the form of loading fees.
In a perfect world, the percentage of an apartment should be less than 30%. Anything above that means the carpet area is smaller and the super built-up area is larger. This may result in purchasers having less space inside their homes.
Bottom Line
The real estate market in Hyderabad appears to have bright possibilities since the city witnessed the most launches in the second quarter of 2021 when compared to the other top six cities in the country. Although the pandemic has impacted the real estate market around the world, the Hyderabad market seems to have a bright market especially in its residential real estate sector. Assetmonk is an online platform offering real estate investment opportunities in Hyderabad, Bangalore, and Chennai. We offer properties with an IRR of 21%. For information on real estate investment in Hyderabad and other budding cities, follow the website.
Hyderabad Residential Real Estate Market FAQ’s:
Why is Hyderabad real estate booming?
People are encouraged to invest in Hyderabad because of the peace, strong law and order, and improved infrastructure, such as radial highways and the Outer Ring Road (ORR). Furthermore, real estate experts have stated that the affordability of a home loan is a significant element in the City’s rising costs.
Is it a good time to buy property in Hyderabad?
According to the Hyderabad real estate market projection 2021, now is the best moment to invest in Hyderabad property; prices have remained relatively stable in recent years and are projected to grow once the epidemic has passed.
In Hyderabad, where is the ideal place to buy a home?
Uppal, Miyapur, Kompally, Manikonda, etc. are some of the best places in Hyderabad to buy a house.
