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 • Market Movers News that impacted ’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 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, , HITEC rate in malls in Urban Renewal Mission (JNNURM) projects were IT offices and luxury and recorded a and 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 , in Grade A offices spread within pre-COVID-19 levels. beneficiaries by December 2020. Maddenaguda, , , 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.

acres ’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 3,300-3,900 11 3.59% 3,500-4,000 12 3.72% Rs 40 lakh - Rs 1 crore 3,800-4,900 14 3.46% 3,700-4,600 12 3.24% Chandanagar 3,600-4,800 14 3.31% 6% Rs 1 crore and above 6,000-7,500 19 3.22% 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 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. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

Note: Supply is basis properties listed on 99acres.com in the studied quarter. Demand is basis queries received on 99acres.com in the studied quarter. INSITE : HYDERABAD 9 ZONAL SHARE OF acres NEW LAUNCHES 23% India’s No.1 Property Portal

With a contribution of about 18 percent to the total new launches 99ACRES’ OUTLOOK reported across the top eight metro cities in Jul-Sep 2020, Hyderabad stood third, just behind Mumbai and The overall homebuying trend in and Vasavi dotting the micro-markets Pune. West Hyderabad continued to Hyderabad remained meek in of , Sanikpuri, Yacharam, be the prime gainer in terms of new Jul-Sep 2020; however; as against Mallampet, and . unit additions. the previous quarter, the sentiment improved marginally. With an increase Amid slow offtake, the unsold inventory Hyderabad in the number of genuine homebuyers, in the city increased by around 8-10 Note: The data depicts share of new launches 77% site visits and enquiries grew by percent to reach 26,400 units in the across zones in Hyderabad in the studied quarter. approximately 20 percent in Jul-Sep 2020. period ending September 2020. It may Residential sales also recorded a hike, take around 17 months to dispose of the although minimally. Around 860 units existing stock. were sold in the studied period against 750 units in the previous quarter. While the commercial sector is yet to revive, the vital parameters delineating Developers leveraged the unlock period the residential market such as new RENTAL and the marginal revival in sentiment to launches, site visits, and buyer sentiment launch their planned projects. Close to remained positive, and realtors are LANDSCAPE 43 projects, including additional phases optimistic that the lower Loan-to-Value in existing projects were launched ratio and the faster economic recovery in the city. The majority of the new from COVID-19 would improve the Key micro-markets based on consumer demand and active listings projects were by Grade A developers situation ahead of the upcoming including Aparna Constructions, GK, APR Localities Most Supplied Market Rental Rates YoY % festive period. Rental Units Share (Rs per Month) Change in Rental ‘Asks’

Gachibowli 3BHK 56% 26,500-33,000 0% 2BHK 30% 18,500-24,000

Kondapur 2BHK 56% 21,000-26,500 3% 3BHK 32% 15,600-19,500

Kukatpally 3BHK 57% 19,000-23,500 -3% 2BHK 40% 12,000-13,500

Manikonda 3BHK 45% 17,500-23,000 4% 2BHK 37% 12,000-15,000

HITEC City 2BHK 61% 32,000-45,500 2% 1BHK 27% 21,000-28,500

Note: Average rental rates and supply have been calculated as per listings posted on 99acres.com in the studied quarter. Key micro-markets have been selected based on expressions of interest raised on 99acres.com in the studied quarter.

INSITE : HYDERABAD 11 KEY HIGHLIGHTS CONCLUDING REMARKS

The residential market of Hyderabad displayed stability as Affordable homes priced within Rs 45 lakh continued to grab the the average ‘asks’ remained unchanged in Jul-Sep 2020. maximum demand share in Q2 2020-21. However, the increased Residential projects by reputed developers with minimum construction timelines, delayed approvals and lean profits have execution risk and lucrative offers lured homebuyers. made it difficult for developers to cater to this segment, resulting in demand-supply disequilibrium. Moreover, although the homebuyers Western locales, such as Chandanagar, Narsingi, Kokapet, are returning to the market, a full-swing revival is yet to happen. The Kukatpally, and , magnetised homebuyers’ attention and seized nearly 50 percent of the economic slowdown has instilled fear amongst buyers, and they are demand share. Mid-sized 2 BHK and 3 BHK configurations apprehensive of undertaking significant investment. A major share of priced at Rs 50 lakh - Rs 1 crore garnered healthy traction. homebuyers expects significant cuts in both resale and new project segments. Hence, builders urge a stamp duty reduction on new sales Price-sensitive buyers looking for low-cost inventory to encourage prospective homebuyers. preferred Beeramguda, Nizampet and Tolichowki near the Blue Line Metro corridor and the commercial hubs of Bachupally and . The per sq ft rate in these areas stood at around Rs 3,100-3,800 per sq ft.

Nagole, LB Nagar, Manikonda, Miyapur and Chandanagar were on the homebuyers’ radar owing to their seamless connectivity via Outer Ring Road (ORR) and National Highway (NH) 65 and the contiguity to the numerous IT/ITeS giants. The average ‘asks’ in these areas hovered between Rs 4,400 per sq ft and Rs 4,900 per sq ft.

Small-sized plots tagged within Rs 25 lakh in the outlying pockets of Yacharam and also remained a favourable investment option.

Annual rental enquiries in Hyderabad plummeted by 50 percent in Jul-Sep 2020. Barring a few popular housing belts of Jubilee Hills, Madhapur, Manikonda, Begumpet and HITEC City, the rental demand across the city suffered a hit. The above pockets predominantly benefitted due to their self-sufficient infrastructure, presence of IT/ITeS majors and a well-established residential market. The average rent in these areas was around Rs 17-22 per sq ft.

INSITE : HYDERABAD 13 ANNEXURES METHODOLOGY

The Insite Report by 99acres.com properties across varied budget captures the trends in the capital segments and BHK configurations. and rental markets across top The report also gives insight into eight metro cities – Delhi NCR, the key micro-markets based on CAPITAL VALUES RENTAL VALUES Mumbai Metropolitan Region consumer demand and active listings (MMR), Bangalore, Pune, Chennai, in the rental market. While demand is Locality Jul-Sep 2020 Locality Jul-Sep 2020 Hyderabad, Kolkata and Ahmedabad. a function of expressions of interest In order to assess the prevailing raised on 99acres.com, supply is Appa Junction 5250 14 sentiment, the report delves based on property listings posted on 4200 Appa Junction 14 deep into demand and supply of 99acres.com in Jul-Sep 2020. Banjara Hills 7680 Attapur 10 FIND BEST OPTIONS TO Beeramguda 3100 Banjara Hills 19 U SELL RENT PRPERT Begumpet 6130 Begumpet 15 3700 Chandanagar 14 Chandanagar 4800 Gachibowli 19 FIND BEST OPTIONS TO Gachibowli 7080 Himayat Nagar 16 Gajulramaram 4000 HITEC City 23 BUY, SELL, RENT PROPERTY Hafeezpet 5310 Jubilee Hills 19 Himayat Nagar 5750 17 Price trends and HITEC City 8300 Kukatpally 15 Mobile App property advice Jubilee Hills 10000 Madhapur 21 on Android platform and iOS Kokapet 5500 Madinaguda 13 Kondapur 6310 Manikonda 14 Kukatpally 5450 11 Genuine listings with LB Nagar 4950 Miyapur 12 Over 9.32 lakh property photographs Madhapur 7200 14 listings Madinaguda 5100 Nizampet 11 Manikonda 4850 17 Mehdipatnam 4350 Tolichowki 12 Miyapur 4450

Nagole 4700 More than Nallagandla 6050 1.7 lakh projects 7000 Narsingi 6100 Nizampet 3680 Pragati Nagar 3940 Sanath Nagar 6500 Shaikpet 6900 Tellapur 5250 Tolichowki 3708 CONTACT US 0120 4879400 Monday - Friday 9:30 AM to 6:30 PM IST *All prices are per sq ft rates acres India’s No.1 Property Portal Email: [email protected] 15 CNTACT US 0120 4879400 Monday - riday 9:30 AM to 6:30 PM IST Email: [email protected]