 "Hyderabad realty not to see much pain compared with other metros: Knight Frank")
The residential property market in Hyderabad is expected to consolidate from the current levels and would see an average price appreciation of 2-3 per cent in the next six months, according to independent global property consultant Knight Frank.
Factors affecting the real estate development in top metros, where consumers were known to have “stopped entering the residential property market” and the developers there facing the “highest loss of reputation” on the back of delayed launches, have not been issues of great concern when it comes to the market here, said Gulam M Zia, executive director, advisory, retail and hospitality at Knight Frank.
“With the kind of launches, at around 15,000 units each year, and mostly being user-driven, the market here is too small to have a 20-30 per cent like price correction being raised about some of the over-heated locations in the country,” he said. However, he said the property price appreciation here had slowed down from an earlier 7-8 per cent on an average to an expected 2-3 per cent in the short term.
In its outlook for the next six months, it has projected the average residential prices here to move higher from Rs 3,509 per square feet (sft) seen in the first half of calendar year 2015 to Rs 3,590 per sft.
“Hyderabad is the among the least priced markets in India and we don’t see any drastic rise in prices as it carries the oldest residential inventory in the country,” said Vasudevan Iyer, Hyderabad director for Knight Frank.
Western Hyderabad it said would continue its outperformance. It accounts for the largest share of under-construction inventory and has the lowest proportion of unsold inventory in relation to under-construction units. “The growth of the IT corridor and financial district, together with the growth of an organised retail market, has enhanced the residential appeal of West Hyderabad and will ensure its standing as the most sought-after zone in the city in the future,” the report said. However, in the long-term, it said East Hyderabad should see more traction in terms of launches, especially along the outer ring road (ORR) and the metro connecting it to the western locations gets completed.
Office space absorption buoyant
In the next six months, a significant 2.4 million sft of quality office space is expected to hit the market and the average rentals are expected to rise 8 per cent to touch an average Rs 42 per sft, from the current Rs 39 per sft.
The office market experienced approximately 1.5 million sft of supply and absorption in the first half of the current year, when compared with 1.9 million sft recorded for the same period last year, and 2.8 million sft in the second half of 2014.
Just three locations- Gachibowli, Madhapur and Manikonda- accounted for almost 75 per cent of the space transacted during the first half of the current year.
The IT/ITeS sector absorption stood at 49 per cent of the total office space activity during the period.
“A steady demand pipeline coupled with limited office space deliveries hitting the market in the following six months will keep vacancy levels down to an estimated 16 per cent,” the report noted.
Factors affecting the real estate development in top metros, where consumers were known to have “stopped entering the residential property market” and the developers there facing the “highest loss of reputation” on the back of delayed launches, have not been issues of great concern when it comes to the market here, said Gulam M Zia, executive director, advisory, retail and hospitality at Knight Frank.
“With the kind of launches, at around 15,000 units each year, and mostly being user-driven, the market here is too small to have a 20-30 per cent like price correction being raised about some of the over-heated locations in the country,” he said. However, he said the property price appreciation here had slowed down from an earlier 7-8 per cent on an average to an expected 2-3 per cent in the short term.
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In its half-yearly (January-June) findings on the market here, it has projected 4,635 launches to take place in the second half of the current year, whereas absorptions would be higher at 7,640 units. This is because the city has an unsold inventory of 33,500 units. In the first half of the year, residential sales here stood at 7,123 units. Knight Frank said the pan-India unsold housing inventory stood at 750,000 units.
In its outlook for the next six months, it has projected the average residential prices here to move higher from Rs 3,509 per square feet (sft) seen in the first half of calendar year 2015 to Rs 3,590 per sft.
“Hyderabad is the among the least priced markets in India and we don’t see any drastic rise in prices as it carries the oldest residential inventory in the country,” said Vasudevan Iyer, Hyderabad director for Knight Frank.
Western Hyderabad it said would continue its outperformance. It accounts for the largest share of under-construction inventory and has the lowest proportion of unsold inventory in relation to under-construction units. “The growth of the IT corridor and financial district, together with the growth of an organised retail market, has enhanced the residential appeal of West Hyderabad and will ensure its standing as the most sought-after zone in the city in the future,” the report said. However, in the long-term, it said East Hyderabad should see more traction in terms of launches, especially along the outer ring road (ORR) and the metro connecting it to the western locations gets completed.
Office space absorption buoyant
In the next six months, a significant 2.4 million sft of quality office space is expected to hit the market and the average rentals are expected to rise 8 per cent to touch an average Rs 42 per sft, from the current Rs 39 per sft.
The office market experienced approximately 1.5 million sft of supply and absorption in the first half of the current year, when compared with 1.9 million sft recorded for the same period last year, and 2.8 million sft in the second half of 2014.
Just three locations- Gachibowli, Madhapur and Manikonda- accounted for almost 75 per cent of the space transacted during the first half of the current year.
The IT/ITeS sector absorption stood at 49 per cent of the total office space activity during the period.
“A steady demand pipeline coupled with limited office space deliveries hitting the market in the following six months will keep vacancy levels down to an estimated 16 per cent,” the report noted.