Download Report
Total Page:16
File Type:pdf, Size:1020Kb
INSITE HYDERABAD RESIDENTIAL MARKET UPDATE JULY - SEPTEMBER 2020 Market Sentiment WHAT’S INSIDE? • Impact of COVID-19 on Indian Real Estate • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted Hyderabad’s realty market in Jul-Sep 2020 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets FROM CBO’S DESK The Jul-Sep 2020 quarter set the pace for the recovery of Indian developers have further fueled the penchant for ready or near-ready residential real estate market. Post an initial lull in sales and new housing units. There seems to be a newfound demand for independent launches in the previous quarter, the current quarter came as a breather houses and builder floors, which offer increased privacy and scope for as sales resurged by almost 2.5 times of the pre-COVID levels. Both Delhi social distancing, as opposed to residential apartments. NCR and Mumbai saw a significant improvement in transactions, QoQ, as end-users flocked to leverage the lucrative deals floating in the market. A gradual improvement in the realty market was also evident from the Price correction, unlike anticipated, remained a far cry; however, with owner listings posted on 99acres, which went up by seven percent against a negotiation window of up to 10-15 percent, the deals closed in at a the pre-COVID times. Buyer responses also reported a 30 percent surge in reduced price of 2-5 percent of the pre-COVID levels. the same time period. New launches went up, QoQ, but remained lower than the previous year. On the policy framework front, a fiscal stimulus of Rs 10,000 crore for Majority of the developers focused on completing the ongoing projects, Maneesh Upadhyaya stuck realty projects, along with the sustenance of Repo Rate at four which were stuck during the nationwide lockdown. While work on Chief Business Officer percent, an all-time low, are likely to push the market towards a revival almost all housing projects resumed in the current quarter, a lot of them 99acres.com in the ensuing quarters. The upcoming festive season may see a further continue to face delays spanning quarters. Liquidity constraints with the improvement in the absorption of residential units, across cities. COVID-19 AND REAL ESTATE NATIONAL OUTLOOK IMPACT ON HOMEBUYERS IMPACT ON INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES After an initial set back amid pay cuts Even as supply chain reopened in Home buying sentiment improved The resale segment remained under and job losses, homebuyers were seen Jul-Sep 2020, a ban on Chinese imports as public sector banks and private pressure with deals closing at a returning to the market in Jul-Sep 2020. impacted the cost of development in players slashed home loan interest 2-5 percent discounted rate on average. Reduced home loan rates, sweetened the realty landscape. Developers cited rates to a 15-year low. This, along Developers also kept new unit prices deals by developers and more scope of increased expenses, and thus, little with resumption of construction unchanged even as some spoke of negotiations in the resale segment were scope to reduce prices in the primary work, helped take the enquiries up by increased costs amid a ban on Chinese seen as the key drivers. The quarter market. Yet, in a bid to offload the 80 percent of the pre-COVID times. imports. However, initial speculations of continued witnessing the popularity existing inventory, several schemes Developers reported a 50 percent hefty price corrections did not hold true of ready housing units, and improved were introduced in the quarter. recovery in the number of transactions. for either of the segments. demand for independent houses and Digital transformation continued as builder floors in most metro cities. developers took to the online medium RENTAL LANDSCAPE SUPPLY Window shoppers exited and genuine to interact with potential homebuyers Rental market remained in doldrums With an addition of over 31,000 units homebuyers were seen leveraging at various stages of the buying cycle. despite the opening up of the in metro cities, new launches went up the discounts available in the market. Several governmental procedures nationwide lockdown. Tenants avoided by 4.5 times, QoQ. The resale segment, Noticeably, the quarter reported shifted online as organisations adopted moving as the majority of offices too, reported an improvement as renewed interest from the NRI homebuyer to the new normal. The infusion of continued with the work-from-home several property owners returned to community against the backdrop of Rs 10,000 crore to aid the completion model. Resultantly, the rental rates the market after lockdown restrictions depreciating rupee and attractive deals of stuck realty projects was hailed by did not see any movement and offtake were gradually lifted. Unsold inventory in the new home category. the industry. was meek in both residential and stood at 4.40 lakh units at the end of commercial segments. September 2020. CHENNAI DELHI NCR 1% KOLKATA 3% 1% SHARE OF NEW LAUNCHES AHMEDABAD 16% MUMBAI 25% The quarter witnessed the launch of about 240 new residential projects in top eight metro cities. Despite being severely hit by the Coronavirus pandemic, Mumbai led all cities with a 25 percent share in new and re-launched projects. Pune, Hyderabad, Bangalore and Ahmedabad followed suit with a 16-19 percent share, each. Delhi NCR made a meagre three percent share of the total new launches, with a few projects in Greater Noida, Ghaziabad and Gurgaon. HYDERABAD Kolkata and Chennai reported minimal new activity from developers. 18% BANGALORE 17% PUNE 19% Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK Real estate expansion State-driven housing gathers speed projects near completion • With COVID-19 fallout impacting the also diminished as the investor The State Level Environment Impact The government has planned to commercial market, conversion rate sentiment reeled under pressure. handover around 6,000 units under of office space leasing in Hyderabad Assessment Authority received • Amid the restrictions on functioning 2 BHK housing scheme in Rampally was merely 10 percent of the around 35 applications for of food and entertainment zones and around 85,000 houses under pre-pandemic levels. environmental clearance in mere and decreased footfalls, vacancy the Jawaharlal Nehru National last two months. Majority of these • Somajuguda, Punjagutta, HITEC rate in malls in Jubilee Hills Urban Renewal Mission (JNNURM) projects were IT offices and luxury City and Begumpet recorded a and Banjara Hills increased by and Valmiki Ambedkar Awas villa projects planned in the few rental deals by IT/ITeS firms nearly 10 percent against the Yojana (VAMBAY) to the identified micro-markets of Gandipet, in Grade A offices spread within pre-COVID-19 levels. beneficiaries by December 2020. Maddenaguda, Kokapet, Tellapur, 10,000 sq ft. Puppalaguda, and Nanakramdugda. • Co-working spaces that were earlier • Lease rate declined by nearly the foci of small entrepreneurs and 30 percent, QoQ, due to hefty multinational firms bore the brunt negotiations amid the existing as their annual leasing dipped by Infrastructure expansion Five new IT parks to spur challenges. Besides, new supply nearly 60 percent in Jul-Sep 2020. gains momentum realty growth The ongoing development work of The approval to five new IT parks 37 link roads spanning across 45 km under the Growth in Dispersion under the Strategic Road Development (GRID) policy would fillip the Project (SRDP) would ease the realty growth in East Hyderabad. congestion on the crucial connectivity The commercial development corridors in Hyderabad. These include spreading over an area of 35 acres the High Tension Line and Old Mumbai is anticipated to generate over Highway, among others. 30,000 new job opportunities and accelerate the residential growth in the region. 99acres India’s No.1 Property Portal HYDERABAD’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments Budget Localities based on Average Average Rental Jul-Sep 2020 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield Active Listings (Rs per sq ft) (Rs per sq ft/month) 3% -9% Within Rs 40 lakh Nizampet 3,300-3,900 11 3.59% Tolichowki 3,500-4,000 12 3.72% Rs 40 lakh - Rs 1 crore Manikonda 3,800-4,900 14 3.46% Miyapur 3,700-4,600 12 3.24% Chandanagar 3,600-4,800 14 3.31% 6% Rs 1 crore and above Gachibowli 6,000-7,500 19 3.22% Kukatpally 4,200-5,500 15 3.19% Demand HITEC City 6,800-8,700 23 3.25% 44% 35%0% 40% 43% 16% 22% Supply Note: Rental Yield has been calculated for a 1,000 sq ft apartment. Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments. BHK-WISE DEMAND AND SUPPLY Key micro-markets across BHK-configurations -11% Configuration Localities based on Average Average Jul-Sep 2020 Consumer Demand and Unit Size Property Prices Active Listings (Sq ft) (Rs per sq ft) 1BHK Nizampet 540-560 3,300-3,900 LB Nagar 560-600 4,500-5,100 5% Pragati Nagar 1,020-1,080 3,500-4,100 2BHK HITEC City 1,100-1,140 6,800-8,700 Narsingi 1,120-1,150 5,500-7,000 Tolichowki 1,350-1,470 3,500-4,000 8% 3BHK Hafeezpet 1,500-1,570 4,800-5,600 Demand -2% Tellapur 1,540-1,570 4,300-5,500 9% 17%0% 56% 45% 29% 34% 6% 4% Supply Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in 1BHK 2BHK 3BHK 4BHK the studied quarter.