The real estate market in Hyderabad has been experiencing a noticeable decline, as recent data from Anarock reveals a drastic drop in sales. With a 23 percent decline in sales, Hyderabad appears to be falling off the realty radar. The allure of owning property in Hyderabad has been impacted significantly, with both residential supplies and absorption rates plummeting in the second quarter of 2024. This substantial decline has raised serious concerns about real estate values, house value, and home value in the city, impacting the overall market sentiment.
Real Estate Hyderabad: A Market in Decline
In its latest research data, Anarock reveals that Hyderabad added just about 13,750 residential units in Q2 2024, compared to approximately 22,960 units added in the first quarter. This represents a significant drop of about 40 percent in the number of residential units added. The decline is not just limited to new launches and absorption; sales have also seen a sharp decrease. According to Anarock, Hyderabad recorded sales of approximately 15,085 units in Q2 2024, compared to 19,660 units sold in the previous quarter. This data highlights a worrying trend for the real estate market in Hyderabad.
Apartments and house sales decline in Hyderabad
The decline in sales has affected various segments of the real estate market in Hyderabad. Apartments sale in Hyderabad have seen a noticeable drop in demand. The market for houses for sale in Hyderabad has also been significantly impacted. Potential buyers are becoming more cautious, leading to slower absorption rates and longer listing times. This cautious approach from buyers can be attributed to increasing property prices and a general sense of uncertainty in the market. As a result, sellers are finding it more challenging to attract buyers, leading to a stagnation in the market.
Commercial Property Sales decline in Hyderabad
The commercial property market in Hyderabad is also feeling the impact of the overall slowdown in real estate activity. Commercial property for sale in Hyderabad is experiencing decreased interest from investors and businesses. This decline can be attributed to increasing property prices and a high base record from the previous quarter. As commercial properties remain unsold, developers are facing financial strains, leading to delays in new projects and a general slowdown in the commercial real estate sector.
Also read: Residential and Commercial Real Estate: Types, Benefits and Investment
Comparative Analysis with Other Cities
Anarock’s data places Hyderabad as the biggest loser among the top seven cities, with a 23 percent drop in residential unit sales. In comparison, Kolkata saw an 18 percent decline, Chennai 9 percent, Pune 8 percent, Bengaluru 8 percent, MMR (Mumbai Metropolitan Region) 3 percent, while NCR (National Capital Region) experienced a 6 percent increase. This comparative analysis highlights the severity of the situation in Hyderabad, as it stands out with the highest decline in sales among major cities in India. According to the survey, “Against the backdrop of rising real estate prices, the residential sales boom in the top 7 cities moderately abated in the second quarter of 2024.” and a high base record of the previous quarter (Q1 2024).” Housing sales witnessed a quarterly drop of 8 percent, standing at approximately 120,340 units in Q2 2024 across the top 7 cities, compared to approximately 130,170 units sold in Q1 2024. This overall decline in major cities indicates a broader trend of slowing real estate activity across the country.
| Year | Market Value (in Billion $) | Percentage Decline |
|---|---|---|
| 2020 | 2000 | – |
| 2021 | 1900 | 5% |
| 2022 | 1750 | 7.89% |
| 2023 | 1600 | 8.57% |
| 2024 (YTD) | 1500 | 6.25% |
Western Cities Leading Sales
Despite the overall decline in real estate sales, the two western cities, MMR and Pune, accounted for over 52 percent of the total sales in the top 7 cities, with over 62,685 units sold altogether in Q2 2024. These cities remain strong players in the real estate market, showing resilience despite the challenging market conditions. NCR is the only city among the top 7 to see a quarterly rise of 6 percent in housing sales in Q2 2024 compared to Q1 2024. This resilience in certain markets indicates that while some cities are struggling, others are managing to maintain or even grow their sales figures.
Impact on Real Estate Commission Rates
The decline in the real estate market in Hyderabad is likely to impact real estate commission rates. With fewer transactions taking place, real estate agents may face challenges in maintaining their income levels. This could lead to adjustments in commission rates to attract more clients and close deals in a slower market. Real estate agents will need to adapt to the changing market conditions, offering competitive rates and enhanced services to secure transactions and maintain their business.
Factors Contributing to the Decline
Several factors are contributing to the decline in real estate values and sales in Hyderabad. Increasing property prices have made it difficult for potential buyers to afford new homes, leading to a slowdown in sales. Additionally, economic uncertainties and changing market dynamics have made buyers more cautious, resulting in lower absorption rates. The high base record from the previous quarter has also played a role, as the market struggles to maintain the high sales figures achieved earlier in the year.
Developer Challenges
Developers in Hyderabad are facing significant challenges due to the declining market. The slowdown in sales has led to financial strains, making it difficult for developers to complete ongoing projects and start new ones. This has resulted in delays and, in some cases, project cancellations. The high cost of land and construction materials has further exacerbated the situation, putting additional pressure on developers to adjust their pricing strategies to attract buyers.
Also read: What is Investment in Real Estate: Types Of Investment, Benefits Complete Guide
Market Outlook
The outlook for the real estate market in Hyderabad remains uncertain. While some segments, such as commercial properties and high-end residential units, continue to attract interest, the overall market is expected to remain sluggish in the near term. Buyers and investors are likely to adopt a wait-and-see approach, waiting for more favorable market conditions before making significant investments.
Recommendations for Buyers and Investors
For potential buyers and investors, it is crucial to stay informed about real estate values, house value, and home value trends in Hyderabad. Conducting thorough research and consulting with real estate experts can provide valuable insights and help make informed decisions. In a challenging real estate environment, patience and due diligence are essential for making sound investments.
Conclusion
The real estate market in Hyderabad is facing a significant downturn, with a noticeable drop in residential sales and new launches. The impact is felt across various segments, including apartments, houses, and commercial properties sale in Hyderabad. As the market adjusts to these changes, potential buyers and investors must stay informed about real estate values, house value, and home value trends. This knowledge will be crucial for making informed decisions in a challenging real estate environment.
Despite the current challenges, Hyderabad’s real estate market has the potential to recover, driven by its strategic location, growing infrastructure, and economic opportunities. However, the road to recovery will require addressing the current market dynamics, economic uncertainties, and adapting to the changing needs of buyers and investors. As the market evolves, staying informed and making strategic decisions will be key to navigating the complexities of the real estate landscape in Hyderabad
Frequently Asked Questions:
A1: The decline is attributed to increasing property prices, economic uncertainties, and a high base record from previous quarters, leading to cautious buyer behavior and slower absorption rates.
A2: Hyderabad has seen a 23 percent decline in sales, with a significant drop in both residential supplies and absorption rates in the second quarter of 2024.
A3: Hyderabad experienced the highest decline among the top seven cities with a 23 percent drop, followed by Kolkata with an 18 percent decline and Chennai with a 9 percent decline.
A: Developers are experiencing financial strains, delays in project completions, and challenges in attracting buyers due to the slowdown in sales and high costs of land and construction materials.
Real estate agents may face challenges in maintaining income levels due to fewer transactions, leading to potential adjustments in commission rates to attract more clients and close deals.
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