Hyderabad is expected to record a 30-33% increase in residential launches in FY2027, the highest among India’s top seven housing markets, even as rising supply and slower inventory absorption push unsold housing stock to a multi-year high, according to ICRA.
The city recorded a 76.7% year-on-year surge in new launches in the first quarter of FY2027, largely concentrated in the Southwest region. The sharp increase was partly driven by projects carried forward from the previous financial year. ICRA expects launch activity to moderate in the coming quarters but projects full-year growth to remain strong.
Hyderabad, the second-largest residential market among the top seven cities, accounted for around 18% of the total residential area sold in FY2026. Housing sales by area increased 4.1% to 118 million square feet (msf) during the year, supported by a 26% increase in luxury housing sales following a sharp correction in FY2025.
In Q1 FY2027, residential sales by area grew 17.3% year-on-year, aided by robust launches, including several large projects. ICRA expects sales by area to grow 11-14% during FY2027.
However, the pace of new supply has continued to outstrip sales, adding to the city’s unsold inventory. New launches increased 10.5% to 133 msf in FY2026 after contracting 33.6% in FY2025. The earlier decline was attributed to project approval delays, supply recalibration by developers and a high base in FY2024, when launches reached record levels.
Hyderabad’s unsold residential inventory reached 296 msf as of June 2026, accounting for nearly 30% of the combined unsold stock across the top seven cities. The luxury segment contributed an estimated 45-50% of this inventory build-up, reflecting the substantial supply of premium housing over recent years.
The inventory overhang, measured by years-to-sell (YTS), increased to 2.4 years in June 2026 from 1.6 years in March 2024, making Hyderabad the city with the highest overhang among the top seven markets. ICRA expects inventory levels to remain elevated amid a strong launch pipeline, with YTS projected at 2.2-2.4 years by March 2027.
Luxury housing continues to shape the market
Luxury housing has dominated new launches in Hyderabad since FY2024, reflecting developers’ response to rising demand for premium homes. However, the segment surpassed mid-income housing in sales by area only in FY2026, when its share of total sales rose to 49% from 38% in FY2024.
In terms of area sold, the luxury and mid-segment categories accounted for 44% and 51%, respectively. The increase in mid-segment launches during Q1 FY2027 indicates a potential shift towards a more balanced supply mix in the coming quarters.
Western Hyderabad remains the primary growth corridor
The western region continues to dominate the city’s residential market, with the Northwest and Southwest corridors together accounting for 85-90% of sales and launches.
Micro-markets such as Kokapet, Neopolis, Tellapur and Khanapur continue to attract residential development due to their proximity to information technology hubs, improving connectivity, established social infrastructure and spillover demand from more saturated locations.
While Hyderabad’s strong launch pipeline points to continued developer confidence in the market, the growing inventory overhang highlights the need for sales to keep pace with new supply. The extent to which demand absorbs the additional stock, particularly in the luxury segment, will remain a key factor shaping the market through FY2027.
