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Property buyers, who had mostly remained on the sidelines in the last one year post the bifurcation of Andhra Pradesh, are now showing keen interest in the Hyderabad residential market.
Tracking the changed scenario, realtors acquired lands in the most sought-after locations in the city in the last quarter, and are now hopeful prices would see sustained uptick in the coming months.
Driving the positive sentiment among the developers is the upcoming launch of the metro rail project, and the political stability in the aftermath of bifurcation. The buoyant office market activity also has helped regain the market momentum, starting from the last quarter of the previous financial year.
“All the negative factors are behind us and buyers are now more confident about acquiring property in the Hyderabad market,” C Shekar Reddy, president of Credai, said. He said developers were now “feeling comfortable” to raise prices as they expect sustained demand due to the low valuations here, when compared with prices in other south metros.
According to him, buyers are increasingly considering acquiring properties in the western part of the city (in the proximity of financial district), followed by the southern stretch close to the Vijayawada highway.
He expects demand to outstrip supply in the Rs 3,000-4,000 per sft property segment as a majority of them lie along the metro rail corridor and enquiries have been significantly higher over here. Overall, there would be around 20,000 new launches this financial year, he said.
However, developers are in “no rush” to launch new projects, and are backing up their plans with adequate bookings, according to him.
Market consultant Cushman & Wakefield projects the city would see 45,000 residential launches in the next three years, with launches in the current fiscal to be around 14,000 units. Being a user-driven market, the projected supply was adequate, it said.
“Predominantly, Madhapur, Gachibowli, and locations near the airport saw 14-18 per cent growth in the last fiscal and we expect sustained demand for residential units in them. In 2015, we expect market to remain positive,” Cushman Hyderabad head Veera Babu said.
Meanwhile, upsurge in the office space activity is expected to drive the housing sector demand higher from the current levels. With an 84 per cent growth in net office space absorption for the Jan-Sept period last calendar year, Hyderabad has joined the fastest growing markets in the country in office leasing by adding 3.87 million sft, according to a report from Cushman & Wakefield. The average deal size here increased 28 per cent at 18,400 sft, the report stated.
Consumer sentiment in the residential market took a strong beating due to prolonged uncertainty over the state bifurcation issue during 2010-2014. The period saw buyers holding back their buying plans and had remained on the sidelines on lack of clarity.
To kickstart demand during the lull phase (2010-14), developers here had offered discounts on unsold units, and some of them even postponed launches as prices were not attractive.
Speaking to Business Standard, Jayashree Kurup, head of content and research at real estate portal MagicBricks, earlier said buyers here were looking for a further drop in interest rates to hit the market, and added “buying sentiments are not down.”
“Buyers are clearly betting on the Hyderabad market as the rates here are 30-40 per cent lower than the similar offerings in Chennai and Bengaluru,” said SMR Holdings chairman and managing director S Ram Reddy.
At a recently held property show here, property developers said they received good enquiries for residential units priced in the range of Rs 45-75 lakh. "Most of the consumers, who booked properties at the show were happy the prices were low compared with other key metros in the south," they said. Enquiries for open plots in the outer limits of the city, including Adibatla, Narsingi, Bibinagar (Nalgonda district) saw good interest during the show, they added.
The IndiaProperty.com event 'Gruhapravesham' saw more than 200 new projects from over 80 builders and plots ranging between Rs 2 lakh to Rs 2 crore. Developers had been able to close spot bookings for property worth Rs 18 crore, IndiaProperty.com stated in release. Participants included Mahindra Life Spaces Developers, Ramky Estates and Farms, Prestige Estate Projects and NCC Urban Infrastructure.
