Hyderabad Realty Outlook

In the past 10 years Hyderabad Real Estate has seen it all, from being an attractive destination for IT/ITES services between 2000-2008 to being a victim of the Global Recession between 2008-09 to political turmoil lurking there in the name of state bifurcation since 2009. Hyderabad Realty witnessed attractive capital appreciation in the period 2000-08. Over the past decade, Hyderabad has eveolved from the commonly apprehended image of an under-developed tier-III city into a vibrant city with thriving Business opportunity and a major centre of employment. Most of the major Real estate destination of India has recovered and recovered strong post-recession except for Hyderabad.  

Andhra Pradesh has gone on a shutdown mode with the latest being the strike in Vijayawada Thermal Power station. The strike by the Anti-Telangana  power sector has crippled life in Andhra Pradesh badly hitting Hospitals and Power supply. This political turmoil is badly hitting the growth of Realty in Hyderabad. The New Launches are almost on a dry state and no capital appreciation can be seen. Work has stopped on most of the undergoing construction due to political instability in the region. But, there is a silver lining in every cloud.

Residential weighted average capital values escalated from approx. INR 1,000 per sq. ft. in the year 2000 to INR 3,100 per sq. ft. by Q3 2008 exhibiting an annual appreciation of approximately 15%.Post the slump triggered by the global financial crisis, the city has failed to replicate the growth rate of pre 2008 years. The political turmoil on Telangana issue could not have happened at a worse time for Hyderabad real estate. The period after the year 2008 has been characterized by fewer project launches and declining or at best stagnating capital values.The weighted average capital value has witnessed a decline from INR 3,100 per sq. ft. in Q3 2008 to INR 2,980 per sq. ft. by the end of Q1 2012 exhibiting a negative annual return of 1.4%. (Source:Prop-Equity)

HYDERABAD - Capital Value Trend

People who couldn’t afford to buy a house five years ago can find a house which is affordable and at a preferred location now. The price/sqft of an apartment in the prime locations of Hyderabad are comparable or in some cases lower than the price existing in the peripheral locations of Navi Mumbai and Gurgaon. Doesn’t it make sense to buy at such huge discounted prices!

Ofcourse, the risk still prevails in Hyderabad Realty. But then, if it were not for this risk the prices wouldn’t be so affordable now would it? The challenge is to keep a good track of the political situation prevailing in Andhra Pradesh and to time your entry well. The market well deserves to be at par with other prime residential markets in the country. Once the situation gets better, there won’t be any looking back for this city. To summarize, the long term opportunities outweighs short term risks.