Hyderabad among 5 cities that recorded lowest real estate sales in Rs 5M segment

Hyderabad: Hyderabad is among the seven major cities in India that have recorded the lowest real estate sales figures in the sub-5 million INR segment.

The city's affordable housing market witnessed a staggering year-on-year sales drop of 44 percent during the third quarter of 2023, spanning from July to September. This unprecedented decline in affordable housing sales sets the stage for a critical issue in Hyderabad's real estate landscape, demanding urgent attention and intervention.

Hyderabad, a city known for its dynamic real estate market, is undergoing a significant transformation, as detailed in Knight Frank India's latest report titled "India Real Estate – Office and Residential Market – Jul-Sep – 2023."

This report not only highlights a trend that has been evolving since 2018 but also underscores a notable departure from the city's traditional real estate stronghold – affordable housing.

While the overall real estate market in Hyderabad has shown modest growth, expanding by 5 percent, it is the dynamics within the market that tell a compelling story. A substantial 52 percent of the city's real estate transactions now fall within the premium category, causing an 11 percent year-on-year surge in price levels. The average price per square foot has reached an impressive 5,518 INR.

The driving forces behind these changes are attributed to price hikes and interest rate increases. These factors have led to a 7 percent increase in down payments and a staggering 14 percent rise in effective Equated Monthly Installments (EMIs). Consequently, the dreams of homeownership for middle-class individuals are increasingly elusive.

The statistics for the third quarter of 2023 reveal that 52 percent of residential sales in Hyderabad now belong to the ticket size of 10 million INR and above, leaving a mere 9 percent for homes below the 5 million INR mark.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on this transformation, emphasizing the need for interventions to stimulate demand and enhance development viability in the affordable housing segment. He remarked, "While we celebrate overall residential market growth, concerns arise, notably in the affordable segment, which has seen a steady decline in Q3 2023."

Baijal continued, "Prolonged slowdown could harm the real estate sector in the long term. Therefore, stakeholders must reconsider strategies to revive the affordable segment and maintain its momentum."

This significant decline in affordable housing sales in Hyderabad highlights a critical issue in the city's real estate landscape, warranting attention and intervention to ensure housing accessibility for all.