Hyderabad Real Estate Faces Slump in Housing Sales Amid Soaring Prices
Hyderabad, once a frontrunner in India’s housing sector, is now witnessing a decline in residential property sales due to a steep rise in prices. Despite consistent demand, the affordability factor appears to be taking a hit, resulting in a perceptible slowdown during the first quarter of 2024.
According to a recent market analysis, Hyderabad reported a 9% drop in housing sales in Q1 of 2024 compared to the same period last year. This trend contrasts starkly with cities like Pune and Bengaluru, which continue to see an upswing in property transactions. Analysts attribute this downturn mainly to the rising cost per square foot in the city’s prominent residential pockets.
Property Prices Soar
In Hyderabad, the average price appreciation of residential units has reached a staggering 10% year-on-year. Areas like Kondapur, Gachibowli, and Kokapet — hotspots for premium housing developments — have shown double-digit growth in prices. This has caused many prospective buyers to either defer their decisions or explore more affordable markets like Pune and Bengaluru.
Industry insiders suggest that developers have passed on increased construction and input costs to the end consumer. The growing demand for premium housing has also skewed the average ticket size upward, making mid-tier offerings relatively scarce in major localities.
Unsold Inventory and Buyer Sentiments
While supply remains robust with several ongoing and upcoming projects across the city, the absorption rate has slowed. The number of unsold units has slightly increased, indicating a mismatch between supply and affordability. Buyers are now more cautious, waiting for price corrections or more favorable loan terms before entering the market.
“Hyderabad’s real estate has been on an upward trajectory for the past few years, but the current slowdown shows that affordability remains a cornerstone of any sustainable growth,” said a local property consultant.
Looking Ahead
Despite the current dip, long-term prospects for Hyderabad remain positive. With infrastructural developments like the Regional Ring Road and Metro Phase II in the pipeline, the city is expected to regain traction. However, developers may need to recalibrate their pricing strategies to cater to a broader buyer base.
As the market adjusts, stakeholders remain hopeful that policy support and improved macroeconomic conditions will help revive momentum in the second half of the year.
