The first half of 2014 has seen residential sales volumes in Hyderabad plunge by over 27 per cent to 7,300 units, according to real estate consultancy Knight Frank.

In a comprehensive analysis of residential and office market performance for January-June 2014, it said that the recent political instability has had an alarming impact on demand during the first six months.

The office market, down by 25 per cent year-on-year during the first half, presents a bleak picture about the second half. However, it is projected to see sustained growth in demand in future.

The Hyderabad realty market, which has been growing at a compounded annual growth rate of 4.9 per cent since 2010, has underperformed significantly as compared to other IT and ITES-sector driven markets.

Notwithstanding the steep drop in absorption numbers during the first half of 2014, the demand is expected to pick-up in the second half of the year as the festive season kicks in.

Launch of projects and absorption levels are expected to increase by 25 per cent and 15 per cent in the second half, respectively. The year is likely to end with a deficit of 8 per cent.

Satish BN, Executive Director, South Knight Frank India, in a statement said: “Developers have already started seeing an increase in enquiries, which bodes well for the remainder of 2014.”

The first phase of Hyderabad metro rail and the outer ring road are two major infrastructure projects that will redefine the real estate landscape in the city in the next two years.

The report expects the Hyderabad market could well be at a turning point in its evolution and could see the price discounts diminish progressively in the coming years.

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