Hyderabad Scales New Heights with Highest Residential Sales in 2023-Hyderabad Real estate Market

January 8, 2024
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Hyderabad Real estate Market-2023

Hyderabad, the capital city of Telangana, has emerged as one of the most sought-after real estate destinations in India. According to a recent report by Knight Frank, Hyderabad recorded the highest residential sales among the top eight cities in 2023, with a growth of 21% year-on-year. In this article, we will explore the factors that contributed to this remarkable performance and the future prospects of the Hyderabad real estate market.

What Makes Hyderabad an Attractive Real Estate Market?

Hyderabad has several advantages that make it a preferred choice for home buyers and investors. Some of these are:

  • Affordability: Hyderabad offers the lowest average property prices among the top eight cities, at Rs 5,318 per sq ft. This makes it an affordable option for middle-income and upper-middle-income segments, who accounted for 77% of the total sales in 2023.
  • Infrastructure: Hyderabad boasts of a well-developed infrastructure, with a metro rail network, an international airport, and a ring road. The city also has a robust IT/ITeS sector, which employs over 5 lakh people and generates a high demand for housing. The upcoming projects like the Hyderabad Pharma City, the Regional Ring Road, and the Hyderabad Aerospace and Defence Park are expected to further boost the infrastructure and employment opportunities in the city.
  • Policy Support: The Telangana government has been proactive in supporting the real estate sector, by introducing various reforms and incentives. For instance, the government launched the Telangana State Building Permission Approval and Self-Certification System (TS-bPASS) in 2020, which simplified the process of obtaining building permissions and reduced the approval time from 60 days to 21 days.  The government also waived off property tax for owners of houses with a built-up area of less than 125 sq yards, and reduced the stamp duty from 6% to 4% for properties registered between June and December 2020.
  • Lifestyle: Hyderabad is known for its rich culture, heritage, and cuisine. The city offers a cosmopolitan and vibrant lifestyle, with a plethora of options for entertainment, shopping, dining, and leisure. The city also has a low crime rate, a pleasant climate, and a high quality of life, making it an ideal place to live and work.

How Did Hyderabad Perform in 2023?

Hyderabad witnessed a remarkable recovery in the residential real estate sector in 2023, after a slowdown due to the Covid-19 pandemic in 2020. According to the Knight Frank report, Hyderabad recorded the highest residential sales among the top eight cities, with 27,059 units sold in 2023, a growth of 21% year-on-year. The city also saw the highest new launches, with 25,753 units launched in 2023, a growth of 157% year-on-year. The unsold inventory in the city reduced by 9% year-on-year, to 35,560 units, indicating a healthy absorption rate.

The majority of the sales and launches were concentrated in the western and north-western parts of the city, which are the IT hubs and have a high demand for housing. The most preferred segments were the 2 BHK and 3 BHK units, which accounted for 87% of the total sales in 2023. The average ticket size of the units sold in 2023 was Rs 71.4 lakh, which was 8% higher than the previous year.

The Hyderabad real estate market also witnessed a strong revival in the luxury segment, with several high-end projects launched and sold in 2023. For instance, the Lodha Group launched its premium project Lodha Bellezza in Kukatpally, which offers 4 BHK sky villas with private pools, starting from Rs 4.5 crore.

The project sold over 100 units within three months of its launch. Another example is the Phoenix Group, which launched its ultra-luxury project Phoenix Kessaku in Banjara Hills, which offers 5 BHK residences with a 360-degree view of the city, starting from Rs 15 crore. The project sold over 50% of its inventory within six months of its launch.

What Are the Future Prospects of the Hyderabad Real Estate Market?

The Hyderabad real estate market is expected to maintain its momentum and growth in the coming years, driven by the following factors:

  • Demand-Supply Gap: Despite the high sales and launches in 2023, there is still a gap between the demand and supply of residential units in Hyderabad. According to a report by Anarock, the city has a pent-up demand of 1.5 lakh units, which is expected to be met by 2025. This implies that there is a huge potential for new projects and sales in the city.
  • Price Appreciation: Hyderabad has witnessed a steady appreciation in property prices over the years, due to the high demand and low supply. According to the Knight Frank report, the city saw a 6% year-on-year increase in property prices in 2023, the highest among the top eight cities. The average property price in Hyderabad was Rs 5,318 per sq ft in 2023, which is still lower than the other metros like Mumbai, Delhi, and Bengaluru. This makes Hyderabad an attractive destination for both end-users and investors, who can expect a good return on their investment1.
  • Rental Yield: Hyderabad also offers a high rental yield, which is the annual income from renting a property as a percentage of its value. According to a report by Housing.com, the city has a rental yield of 3.7%, which is higher than the national average of 3%. The city also has a low vacancy rate, which means that the properties are occupied by tenants for a longer duration. The high rental yield and low vacancy rate make Hyderabad a lucrative option for investors, who can earn a regular income from their properties.

Conclusion

Hyderabad has emerged as one of the most promising real estate markets in India, with the highest residential sales and launches in 2023. The city offers affordability, infrastructure, policy support, and lifestyle, which make it an attractive destination for home buyers and investors. The city also has a huge demand-supply gap, a high price appreciation, and a high rental yield, which indicate a bright future for the Hyderabad real estate market. If you are looking for a property in Hyderabad, you can explore the various options available on our website and contact us for more details. We will help you find your dream home in the city of pearls.

FAQ’s

Q: Which are the best areas to buy a property in Hyderabad?

A: The best areas to buy a property in Hyderabad depend on your budget, preferences, and requirements. However, some of the most popular and promising areas are Gachibowli, Kondapur, Kukatpally, Miyapur, Hitech City, Madhapur, Banjara Hills, Jubilee Hills, and Manikonda.

Q: What are the benefits of buying a property in Hyderabad?

A: Buying a property in Hyderabad can offer you several benefits, such as:
1.High returns on investment:
2.Affordable and quality housing:
3.Excellent infrastructure and connectivity: 
4.Cosmopolitan and vibrant lifestyle:

Q: What are the challenges and risks in the Hyderabad real estate market?

A: The Hyderabad real estate market, like any other market, has its own challenges and risks, such as:
1.Regulatory uncertainties: 
2.Market fluctuations: 
3.Quality and delivery issues: 

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