Hyderabad Real Estate beckoning all – Investors and End Users Alike

The Hyderabad Residential Real Estate market has an interesting trajectory to narrate—from emerging as an IT hub to fraught with political risks and finally serving as the joint capital of two states. The following post explores the Hyderabad residential realty market over the decade.

An embodiment of the oxymoron of antiquity and modernity, Hyderabad’s real estate market is once again moving up to carve out a prominent place under the sun. Driven by a mammoth groundwork development that has dotted the city’s skyline, within the last one decade the real estate sector of Hyderabad has experienced an enormous makeover. The curve of the Hyderabad real estate has witnessed it all—from being a cynosure of real estate developers to a period of stillness owing to political mayhem and bouncing back to heights. Currently, the capital values within the property market of Hyderabad are comparatively lower than that of other metropolises. Despite this, the property market of the city has once again emerged as one of the most sought-after real estate destinations within the Indian real estate scenario. The picture below traces the growth of the Hyderabad property market over the last one decade.

2008 onwards Hyderabad witnessed the emergence of an array of IT/ITeS organizations; this was followed by bio-technology and pharmaceutical companies, industrial parks, Special Economic

Zones (SEZs) all establishing a mark in Hyderabad. Such moves led to the residential real estate projects also vying for a place. Presence of an already impressive multinational corporates like Google, Facebook, HP and Accenture had already redefined the commercial real estate of Hyderabad. Since economic development, the overall property market of Hyderabad has been basking under the glory. With an IT boom, the city not only recorded a huge boost in it’s infra projects but also underwent a sea change in its demographics. Such major shifts definitely had a positive impact on the property market of the city. Among the end users of the city, nearly 50% comprise IT professionals who usually fall under the high income group. Apart from this, rapid globalization has led to changes in peoples’ taste. Therefore demands for various types of properties like villas, duplexes, and studio apartments have increased in the recent past.

Infra Projects in Hyderabad

Several key infra projects are being constructed across the city that have been directly instrumental in giving a fillip to the realty souk of the City of Pearls. The table below gives a fair idea of the infra projects that are all set boost the city’s property market.

Known for its resilience, needless to say that Hyderabad’s realty market bounced back in no time. Now open to an upswing, a thriving economy, dynamic workforce offers a promising future to end users. Managerial and software cadre have given a further impetus to a consumerist inclination and the priority is obviously housing projects. The software corridor is back with a bang and new projects are being launched that are expected to firm up the housing realty to an even greater extent. The boom along the neighbourhoods of Gachibowli, Madhapur and Nanakramguda is worth noting where property prices have appreciated at least 10% per annum. The following paragraphs explore the residential property market of the city elaborately.

West and North Hyderabad

Western Hyderabad has emerged as one of the most promising real estate destination in the last five years. The neighbourhood of Kukatpally has slowly grown as a prized destination where residential and commercial projects have been thronging. Developers like Mahindra Life Spaces have invested in mega realty projects like Ashvita. Price trends in west Hyderabad regions continue to range between INR 2800 to INR 4000 per square feet. Within the last five years, west Hyderabad has went on to become one of the most favourable realty destinations.

On the other hand, north Hyderabad has witnessed a slow but steady growth and luxury housings have been dominating this region. Though real estate activities have not been that rampant, but localities like Alwal, Kompally, and Sanatnagar have recorded a boom in overall demand for housing projects. While luxury housings are yet to make a mark, affordable housing projects have taken away all the laurels. Experts are of the opinion that the situation can get better with each passing day. 2BHK apartments are more in demand in north Hyderabad as compared to west Hyderabad. East and South HyderabadInterestingly, eastern Hyderabad has opened up after lull. Areas like the Outer Ring Road, Warangal Road, Uppal and Boduppal have been dotted by a number of real estate projects. Trends have been noticed that there is a demand for apartments more in east Hyderabad.

Of late, the neighbourhoods of Ghatkesar and Pocharam are creating ripples within the segment as townships are being launched in the area. Flanked by Nagarjuna Sagar Road, Warangal Highway and Uppal Road, these neighbourhoods have been attracting a lot of residential realty activities in the recent past.  Alternately, south Hyderabad has been one of the top localities for real estate activities since the announcement of the International airport at Shamshabad. The locality of Shadnagar has been attracting a host of investors and end users. Several plots have been sold off within the last five years. Central zone within south Hyderabad covers areas such as Banjara Hills, Jubilee Hills, Necklace Road, Panjagutta continue to be leaders within the residential segment.

Some of the ultra-luxurious residential segments within the Hyderabad property market are available in these localities. Shadnagar in south Hyderabad has been attracting a lot of real estate opportunities in the recent past. Such areas are offering long-term investment returns within the realty segment of Hyderabad. Price trends in these regions from INR 2500 to INR 3000 per square feet.  Bio-conservation plans are not only expected to boost the region’s green belt but also the real estate market of the overall region. Another new locality that is coming up in south Hyderabad is Attapur.

Growth Drivers of the Hyderabad Realty Market 

While the Real estate market of Hyderabad is comparatively cheaper than that of other cities, the major growth drivers include the following:

Availability of Developable Land

Commercial drivers such as IT/ITeS, Automobile Services, Banking and Financial Services
Physical and Social Infrastructures like well-planned peripheral roads, world class airport and a huge concentration of educational institutions

“Hyderabad accounts for 12% of the Indian software exports providing a direct employment to about 2.75 lacs people.” –    NASSCOM report

Reasons to Invest in Hyderabad

There are ample reasons to invest in Hyderabad; some of these include the following:

Lower Capital Values

Amongst nine major cities of India, Hyderabad commands the lowest capital value. A comparative analysis of the city’s capital values with other cities show that the average capital value in Hyderabad is moving at a discount of 30%.

Upcoming Infra Projects

The city has been witnessing a rapid growth in the infra projects to a considerable extent. Planned on the lines of Delhi metro railway, the project would be covering three main corridors with a daily target of 15 lakh passengers. Such a move is definitely expected to boost the overall property market of the region.

Rising Rental Values and Stagnant Capital Values

While capital values have remained somewhat stagnant, the rental values within the residential property market has considerably increased. The returns from these residential properties have been quite fruitful.Following the current growth trajectory and the political risks of the Telengana issue, it can be said that the real property market of Hyderabad has a promising future and needless to say that investments are bound to yield substantial results.

Backed by a strong array of growth drivers and a perennial immigration of professionals from across the nation, Hyderabad’s real property market definitely has the potential to grow in leaps and bounds. As of the current valuations, the opportunities within the city’s property market definitely outweigh the political risks.

Future Outlook

Now, with the formation of the new state of Telengana, the capital values of Hyderabad would reach up to lucrative levels as the city is all set to serve as the joint capital of the two states—Andhra Pradesh and Telengana.

Alternately, in the given economic scenario, investing within the Hyderabad real estate market is worth all the efforts as it is supposed to yield substantial results. So, if you are planning to invest in a property in Hyderabad, now is definitely the time. Go ahead and make the best of it!

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