The realty sector in Hyderabad, a year after the bifurcation, has been witness to the housing market stabilising and the office segment recovering.
The office demand is picking up but is faced with supply constraints. The overall scenario presents a mixed trend.
Hyderabad has witnessed the lowest number of launches amongst all Indian markets during the first half of 2015 and the sales volume was the lowest amongst top 8 cities in the country, but one rung above Kolkata, according to real estate consultancy Knight Frank.
The first half has seen just 5,460 units being launched, down 31 per cent. The continued reduction in supply and slow improvement in sentiment may push up prices by about 3 per cent, the consultancy report predicts.
Office market The Hyderabad office market was also witness to lowest level of absorption since the first half of 2014. The dwindling availability of office space and unfulfilled demand have lead to firming up of rentals. Lack of quality office space has also limited overall absorption numbers and has forced occupiers to move towards peripheral areas.
Presenting an analysis of current realty trends and comparing the Hyderabad market with other major cities, Ghulam M.Zia, Executive Director, Advisory, Retail and Hospitality, Knight Frank, said, “While pricing is a local issue, Hyderabad realty prices are amongst the lowest when compared to other cities.”
Vasudevan Iyer, Branch Director, Knight Frank, said, “While there is a drop in residential launches and absorption levels are also low, the scenario is bound to change soon with the recent RBI rate cuts, infrastructure development with metro connectivity and further impact of the political stability.”
He further said the office market is experiencing an unsettled scenario with demand in place but scarcity of supply. The increase in demand, declining supply, falling vacancy, result in firming up of rentals. This shows consolidation in office market.”
Gachi Bowli, Madhapur and Manikonda, home for IT/services firms, are the most preferred locations and have witnessed hike in rentals and also leasing.