Share of high-end residential sales in Hyderabad surge to more than 50% since 2022: CBRE

Hyderabad, August 2, 2024: CBRE South Asia Pvt. Ltd and The Confederation of Real Estate Developers’ Associations of India (CREDAI)- Telangana, announced the findings of its joint report, ‘Hyderabad’s Residential Renaissance: Dissecting the city’s transforming housing landscape.  According to the report, the sales in the high-end residential segment (INR 1-2 cr above) in Hyderabad now account for over 50% from CY 2022 onwards, up from ~30 % until CY 2021. Since 2022, launches in the high-end residential segment in the city account for over 55-65% share, compared to less than 20% of new launches each year before the pandemic.

In contrast, the mid-segment (INR 45 lakhs to INR 1 cr) residential sales share in Hyderabad has dropped to less than 25% in H1 2024, down from the 50% share until CY 2021. Similarly, the share of launches in the mid-segment has dropped to ~25% compared to ~60-70% in the pre-COVID period.

Hyderabad’s residential market has traditionally been dominated by the mid-end (INR 45 lakhs to INR 1 crore) segment in terms of new launches. However, in recent years post-COVID, there has been a noticeable shift towards the high-end (INR 1-2 crore) segment, driven by rising disposable incomes and evolving buyer preferences. The premium (INR 2-4 crore) and luxury (INR 4 crore above) segments, previously accounting for less than 5% of overall launches until 2021, have grown to over 20% of the city’s total launches in 2023 and the first half of 2024. This growth is largely due to significant developments in the western part of the city, particularly in areas like Kokapet, Narsingi, Tellapur, Manikonda, and Nanakramguda. Developers have been launching more 3 BHK, 4 BHK, and larger units due to the post-COVID demand for spacious living environments and dedicated home offices and recreational areas. This trend is particularly evident in Kokapet (Neopolis) and Nanakramguda in the western part of Hyderabad.

Historically, mid-end units dominated sales, representing over half the total units sold annually until 2021. Since 2022, there has been a significant shift towards high-end units (INR 1-2 crore), which now make up 50% or more of total sales. The premium and luxury segments have also seen a notable increase, contributing around 15-20% of total sales post-COVID, reflecting a preference for upscale living options. The growing demand for larger housing units, such as 3 BHK and 4 BHK, aligns with the broader trend towards more luxurious residential properties and higher housing loan values.

Segment-wise launches

Segment -wise sales

Evolution of Premium & Luxury Residential Market in Hyderabad

Hyderabad’s luxury residential market is experiencing a surge driven by a confluence of factors. Increased interest from both domestic and international investors, including NRIs and HNIs, coupled with a strengthening US Dollar, has fuelled demand for premium properties. The city’s growing economic prowess, evidenced by its ranking among the top 65 wealthiest cities globally and the 10th fastest-growing millionaire hotspot, further underpins this trend.

A significant influx of luxury housing units since 2022, primarily concentrated in upscale neighbourhoods like Jubilee Hills, Banjara Hills, Hitech City, Raidurg, and Kokapet, has catered to this rising demand. These areas, offering high-end amenities and prime locations, have witnessed heightened sales activity for properties priced above INR 20 crores.

Hyderabad’s robust economic growth, driven by a thriving private sector and improving infrastructure, positions the luxury residential segment for sustained expansion. The city’s allure as a destination for affluent buyers seeking a blend of luxury living and sound investment opportunities is undeniable.

Hyderabad’s Residential Market Overview

Hyderabad accounts for 12% of the total housing stock among the top seven cities, which include Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, and Kolkata. Notably, a 35% share of the city’s residential stock has been introduced over the past ten quarters. The top five developers contribute 23% of this residential stock. Reflecting a significant expansion, the housing stock has grown 2.2 times in the past five years and 3.5 times over the past decade. Moreover, the units sold in the last ten quarters represent 30% of the city’s total absorbed stock, highlighting the dynamic growth in Hyderabad’s housing market.

The city has experienced a surge in residential development in recent years, reflecting its burgeoning economic vitality and increasing desirability as a place to live. Since the COVID-19 pandemic, the city has achieved unprecedented growth in new residential launches, culminating in an impressive residential stock of 4.4 lakh apartment units by June 2024. This expansion has been accompanied by robust demand for housing across all segments, with approximately 1 lakh units sold over the past ten quarters. 

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Hyderabad’s residential market has dramatically transformed, establishing itself as one of India’s most dynamic and sought-after real estate destinations. This evolution is marked by a surge in residential property launches and a steady rise in demand, driven by affordable housing options, a high quality of life, and a vibrant influx of professionals. Moreover, the city’s luxury residential market is experiencing unprecedented growth, fuelled by increased interest from domestic and international investors, including NRIs and HNIs. The strengthening US Dollar and Hyderabad’s ranking among the top 65 wealthiest cities globally, as well as the 10th fastest-growing millionaire hotspot further bolsters this trend. With robust economic growth and improving infrastructure, the luxury residential segment in Hyderabad is poised for sustained expansion. The city’s appeal as a prime location for affluent buyers seeking luxury living and sound investment opportunities continues to grow.”

V. Rajashekar Reddy, General Secretary, CREDAI Hyderabad, said, “Telangana’s proactive policy landscape has been a key catalyst for Hyderabad’s burgeoning residential market. The state’s commitment to streamlining processes and fostering a transparent ecosystem has been instrumental in driving growth. RERA’s successful implementation and the expedited approval system under the Telangana State Building Project Approval and Self-Certification System have instilled confidence among buyers and developers alike. 

Coupled with this robust policy framework and government of Telangana’s Vision 2050 plan, the city’s infrastructure advancements have been a game-changer. Expanded metro rail networks, improved connectivity through the ORR and RRR, and multi-modal transit systems have enhanced accessibility and boosted residential demand across the city. This synergistic interplay of policy reforms and infrastructure development has positioned Hyderabad as a prime residential investment destination.”

Sharing his views, Gipson Paul, Senior Executive Director and Head – Hyderabad, CBRE India, said, “The pandemic has profoundly reshaped this landscape, emphasising security and access to essential amenities. Consequently, there is a marked preference for branded residences, penthouses, sky villas, and independent floors within meticulously planned townships. These modern living options offer opulent lifestyles and foster a sense of community and enhanced security. This evolution highlights Hyderabad’s adaptability and ability to seamlessly blend traditional prestige with modern convenience, solidifying Hyderabad’s status as a premier luxury real estate market.”

Outlook 

Developers Perspective: Key Takeaways

• Align with Buyer Preferences: Understand and cater to the evolving needs and preferences of modern homebuyers in terms of unit size, configuration, amenities, and add-ons.
• Strategic Project Launch Timing: Optimize project launches based on thorough market research and analysis of market conditions.
• Elevate Luxury Living: Offer holistic living experiences with smart home technology, eco-friendly features, expansive spaces, and strong emphasis on security, convenience, and sustainability.
• Comprehensive Amenities: Provide a wide range of amenities catering to different age groups and lifestyles, including child-friendly spaces, senior citizen amenities, co-working spaces, and recreational facilities.
• Sustainability as a Differentiator: Incorporate green features like energy-efficient appliances, rainwater harvesting, renewable energy sources, and smart home technologies.

Homebuyers Perspective: Key Takeaways

• Market Conditions Favor Buyers: While new project launches may moderate due to current market conditions, the availability of unsold inventory provides buyers with a broader selection of properties, potentially leading to more informed purchasing decisions. 
• Long-term Optimism: Hyderabad’s robust economy, government initiatives, and infrastructure development will sustain strong residential demand.
• Favourable Interest Rates: Low interest rates enhance affordability and extend the festive season buying window.
• Thriving Apartment Segment: The apartment segment continues to thrive, driven by a preference for community living and comprehensive amenities.
• Growing Demand for Villas: The burgeoning villa market underscores a growing demand for larger living spaces and private retreats.

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