Hyderabad residential market declines due to various reasons

Hyderabad: In the latest assessment, Knight Frank India noted that Hyderabad recorded registrations of 4,313 units of residential properties in July 2022, which was lower by 20% month on month (MoM). Properties over Rs 50 lakh and above witnessed fewer transactions in the last month contributing to the slowdown.

The drop was caused by adverse sentiments towards major investment decisions in ‘Ashada Masam’ combined with heightened uncertainty over rising interest rates. The total value of properties transacted in July 2022 stood at Rs 2,101 crore also registering a decline of 26% MoM. Since the beginning of the year, the city has seen sales of 40,897 residential units with a total worth of Rs 20,023 crore. The Hyderabad residential market includes four districts, namely Hyderabad, Medchal-Malkajgiri, Rangareddy and Sangareddy.

Of all residential sales registered during July 2022, homes in the price band of Rs 25 to 50 lakh constituted 56%, which is an increase from a share of 34% in July 2021.

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Demand in the less than Rs 25 Lakh ticket-size however weakened with its share constituting 18% compared to 35% a year ago. The cumulative share of sales registrations for properties with ticket-sizes of Rs 50 lakh and above declined to 26% in July 2022 from 31% in July 2021

Homes in the size of 1,000 to 2,000 sq. ft constituted 72% 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 July 2022 as well. A district level study shows that 41% home sales registrations were in the Medchal-Malkajgiri district followed by Rangareddy district at 38%. The share of Hyderabad district in total registrations was recorded at 16% in July 2022.

The weighted average prices of transacted residential properties, as per the registration data, has grown by 9% YoY in July 2022. Sangareddy district saw the steepest rise of 27% YoY in July 2022 indicating that higher value homes were sold in this location during this period. Price growth in the Hyderabad continued to remain strong across all micro markets.

Shishir Baijal, Chairman & Managing Director, Knight Frank India said, “Hyderabad residential market, which has been largely resilient during the pandemic, recorded some decline in activities in July 2022 due to a plethora of reasons, ranging from rise in prices to upward revision of home loan rate. Residential registrations and State revenues from registrations have seen a decline in this month. Going forward, we do expect some short-term moderation in activities due to the rising home loan rates and an increase in prices in the market, however, the strength of the latent demand in the market is expected to keep the market buoyant in mid to long term basis, given the overall economic growth and the rise in income levels.”

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