Knight Frank India has noted that the monthly residential property registrations in Hyderabad market stood at 5,146 units in February 2022. The increase in registration costs (upward revision in registration/ market values effective February 1st 2022) for the second time in FY 2022 has slowed down home sales, causing apartment sales registration volumes to drop 25% YoY in February 2022.
The rise in registration costs has hit the less than INR 2.5 mn category the most, as sales registrations in this category reduced significantly to a mere 844 units in February 2022 as against a much robust 2,888 units in February 2021. The Hyderabad residential market includes four districts of Hyderabad, Medchal-Malkajgiri, Rangareddy and Sangareddy.
69% of residential sales registered during February 2022 have occurred in the under INR 5 mn ticket size category, as compared with 76% in February 2021 in this category. Within this category, demand in the less than INR 2.5 mn ticket-size remained weak at a mere 16% in February 2022 compared to 42% in February 2021.
Traditionally, this extremely price-sensitive segment constitutes the highest sales registrations in the Hyderabad market and the steep fall in its share accounts for the lower volume of sales registrations in February 2022. The share of sales registrations of all other ticket-size segments stayed stable or grown marginally in YoY terms in February 2022. The INR 2.5-5 mn ticket size segment’s share grew the most from 34% in February 2021 to 52% in February 2022.
The growth seen in the market shares of the mid and high ticket-size segments is also reflected in the share of sales in various unit size ranges. The share of sales in all unit-sizes over 1,000 sq ft constituted 85% of all home sales registrations in February 2022. Of these, homes in the size of 1000 – 2000 sq. ft. consist of 74% of all sales registered during the period. The trend of homebuyers looking to upgrade and move into larger living quarters, that was sparked by the pandemic, continued to hold strong in February 2022 as well.
While total sales have dropped by 25% in YoY terms in February 2022 for the four districts, a district level analysis shows that the Hyderabad district saw a 64% YoY drop in sales registrations during the period. Even in terms of share of total sales, the district accounted for 10% of the residential units registered during the month, compared to 20% from a year ago.
The weighted average transacted price of residential properties, as reflected by the registration data, has grown by 21% YoY in February 2022. While price growth in the Hyderabad market has been strong in recent times, this extraordinary growth in February should be attributed to sharp fall in share of the sales registered in the under INR 2.5 mn segment. Characteristically, this is the lowest priced segment (per square feet basis) due to the need to keep ticket size low without overtly compromising on the area.
