WHAT ARE THE FACTORS CONTRIBUTING TO RESIDENTIAL REAL ESTATE GROWTH?
Ajitesh Korupolu - The sale of residential units in the first half of 2022 has been the highest in the last 11 years. The city has been securing the top spot amongst all the other metros in the ‘Quality of Living’ report for the last 6 years consecutively. Another factor is the inflow of people from other parts of the country. With blue chip companies setting shop here, there has been a rise of 62% in office space transactions in the first half of 2022. And thirdly, the fast-paced infrastructural development around the city has catapulted Hyderabad’s real estate.
Raghavendra U Hegde- The pro-development approach of the Government and its policies have benefitted the real estate industry. The city has excellent physical and social infrastructure contributing to the ease of doing business. Also, post-pandemic, the increase in remote and hybrid working model opportunities has boosted the growth of residential development and growth. Adding on to this, IT hubs for start-ups, metro connectivity, the good connectivity of the Ring Roads, lower interest rates, and increased economic activity are also reasons for growth.
WHICH ARE THE PROMINENT MICRO MARKETS OF THE CITY?
Ajitesh Korupolu - Hyderabad’s western corridor continues to be the epicenter of commercial activities. Places like Nallagandla, Kondapur, Gachibowli, Puppalguda, Kokapet continue to grow in demand, as the biggest IT companies are establishing their presence here. Places such as Mokila, Tellapur and Bachupally continue to grow in prominence thanks to the ease of travel to Gachibowli IT hub. Government policies aiming at balanced growth have also impacted socio-economic development in the eastern stretch. With Infosys setting up a 450-acre campus on that side, the residential landscape is bound to change for the better.
Raghavendra U Hegde - A few prominent residential micro-markets are: Tellapur - a destination for premium gated communities, Manikonda – this market is witnessing a rental housing demand due to its proximity to tech parks, the mid-segment market, Kondapur - well connected to Hitech City; Gachibowli and Kukatpally, Kokapet - a prominent mid-segment micro market with close proximity to Gachibowli, Narisingi - with good connectivity to Wipro Circle, a favourite destination for mid to high-premium gated communities, Nanakramguda - close to Gachibowli Hi-Tech city. Its emerging as a high-end premium micro-market. The other micro-markets in focus are Mankonda, Kompally, Kandukar, and Kukatpally.
WHAT ARE SOME OF THE MAJOR CHALLENGES FACING THE REALTY SECTOR OF THE CITY?
Ajitesh Korupolu - Customer today has become more cautious as there has been a huge rise in real estate players in the market now. Customer expectations from residential projects have also increased as they are spoilt for choices. From an industry growth perspective, to meet the exponential rise in real estate there is a dire need to increase construction efficiency at large scale, also skilled labour mobilisation, organised capital, innovation in design, and technological advancements are needed.
Raghavendra U Hegde - Oversupply of housing is leading to an increasing percentage of unsold inventory. Overpricing and unaffordability and unlimited FSI are other challenges of the sector. Over supply of high-end development’ and supply and demand gap are majorly seen across all the micro-markets. Dependency on the investor market and the expectation of a higher return on investments will be a big challenge in this sector.
WHAT IS THE GROWTH POTENTIAL OF THE CITY?
Ajitesh Korupolu- The biggest global companies are looking at Hyderabad as their gateway to India. Government plans to boost infrastructure between the Outer Ring Road and the proposed Regional Ring Road through road and metro that will give rise to more micro-markets gaining prominence. Most importantly, it is imperative for builders to embrace construction technology in order to be on top of the growing quality needs and crisp timelines of delivery.
Raghavendra U Hegde - One of the main reasons behind Hyderabad’s real estate market growth is the city’s infrastructure development and transport system like metro. An increase in key sectors such as IT, Pharma, Aerospace, and Defence shall create short and long-term employment opportunities. The number of people moving to the city has increased, creating demand for housing. However, in Hyderabad there’s no restriction on FSI, whereas, the entire country’s average FSI is projected at 2.5. This has resulted in sizable pressure on its infrastructure. Affordability is another key aspect needing attention.
