Hyderabad’s real estate market is witnessing a significant transformation, with an increasing number of high-value property transactions. Properties priced above Rs 1 crore are now the new normal, reflecting the strong momentum in India’s housing sector.
Surge in High-Value Property Transactions in Hyderabad
A recent report titled “Real Insight Residential – January-March 2024” by PropTiger.com reveals a notable shift in Hyderabad’s real estate market. Between January and March 2024, approximately 14,290 housing units were sold in Hyderabad, and 61 percent of these were priced over Rs 1 crore.
Breakdown of Housing Units Sold in Hyderabad (January-March 2024)
- Over Rs 1 crore: 61%
- Rs 75 lakh – 1 crore: 17%
- Rs 45 lakh – 75 lakh: 18%
- Rs 25 lakh – 45 lakh: 4%
This trend highlights the growing demand for premium properties in Hyderabad, indicating a shift towards luxury housing options.
Strong Momentum in India’s Housing Market
The report also underscores the robust growth in India’s overall housing market. In the first quarter of 2024, residential sales across the top eight cities increased by 30 percent, showcasing a remarkable 41 percent year-on-year growth in residential sales. This upward trend is a testament to the resilience and dynamism of India’s real estate sector.
Rising Demand for Premium Properties
In an interview with The Pioneer, Vikas Wadhawan, the group CFO of PropTiger.com, emphasized the escalating demand for premium properties in the first quarter of 2024. He noted that the rising costs of land, construction, and inputs have made the once-luxurious threshold of Rs 1 crore more common in major cities. Homebuyers are increasingly seeking residences with modern amenities and spacious layouts, driving the demand for high-value properties.
Evolving Preferences of Homebuyers
The shift towards larger, amenity-rich homes is a key factor contributing to the uptrend in property prices. Today’s homebuyers are more discerning, looking for homes that offer not just space but also a range of modern conveniences. This evolving preference is reshaping the real estate landscape, making high-value properties more desirable.
Promising Opportunities for Investors
Despite fluctuations in various price segments, the overall trend in Hyderabad’s real estate market indicates promising opportunities for investors. The market is clearly on a positive trajectory, driven by the changing preferences of buyers who prioritize luxury and modern amenities in their homes.
In the first quarter of 2024, approximately 100,000 new residential units were launched in the top eight cities of India. Although there was a substantial release of pent-up supply in the initial two years following the pandemic, the momentum has decelerated significantly, evidenced by a 30% year-on-year decline in new supply during the January-March quarter of 2024.
Segment-wise Decline and Shift
The decline in new supply is especially pronounced in the low-to-mid segment (below INR 45 lakh price bracket). This segment’s share has decreased to 21% from the pre-pandemic Q1 2019 level of 50%. In contrast, the high-end segment (INR 1 crore and above) has seen a significant rise, capturing a 36% share in the current quarter, up from just 14% during the same period in 2019. This trend is driven by nearly half of Q1 2024’s residential supply being concentrated in Mumbai and Hyderabad, where demand is higher for properties over INR 1 crore. This shift underscores a current preference among homebuyers for projects that align with lifestyle preferences rather than just budget considerations.
City-wise and Configuration Trends
Mumbai, Pune, and Hyderabad led the new supply in Q1 2024, accounting for 75% of the overall new supply in the top-eight cities. Specific micro-markets such as Hinjewadi in Pune, Thane West in Mumbai, and Patancheru in Hyderabad saw the maximum new supply.
Developers have emphasized the 2 BHK configuration, which made up 39% of the total new supply, closely followed by the 3 BHK configuration at 28%. High-intent searches on property platforms indicate a growing interest in larger configurations, such as 3 BHK and 3+BHK, which were six times higher in Q1 2024 compared to the same period the previous year.
Consumer Preferences and Developer Focus
The sustained new supply in the high-end segment has garnered significant attention from homebuyers seeking quality projects. According to a consumer sentiment survey, 58% of homebuyers prefer purchasing from developers with a proven track record in quality and delivery. In the upcoming quarters, it is expected that developers will continue to focus on larger configurations and amenities that cater to evolving consumer preferences, including healthcare facilities, safety and security measures, and ample open and recreational spaces.
Shifting Supply Trends
- Low-to-Mid Segment (below INR 45 lakh): Share drops to 21% from 50% pre-pandemic.
- High-End Segment (over INR 1 crore): Share rises to 36% from 14% pre-pandemic.
This analysis highlights the dynamic shifts in the residential real estate market in India, reflecting changing consumer preferences and market conditions post-pandemic.
