Knight Frank India today launched the eighth edition of its flagship half yearly report – India Real Estate. It presents a comprehensive analysis of the residential and office market performance of Hyderabad for the period July–December 2017 (H2 2017).
- Home launches hit an all-time low in H2 2017 with a meagre 940 units entering the market – an 84% drop over H2 2016
- Near standstill market courtesy RERA and its impending implementation
- Sales volumes were also down by 13% compared to H2 2016
- Lack of clarity on GST and shortageof ready to move in homes brought down sales in H2 2017
- Developers shift focus towards affordable homes. Close to 40% of the launches that happened in the city were under INR 5 mn.
- Hyderabad recorded the highest ever office transaction (3.34 mnsqft) in a six month period in H2 2017; however on a YoY comparison it fell by 4% in 2017
- With bulk of the projects in the pipeline new office supply dropped by 48% YoY in H2 2017
- Want of quality office space has pushed vacancy levels across key markets such as Madhapur, HITECH City, Gachibowli and Nanakramguda to 2-4%
- While the share of the IT/ITeS sector, traditional market leader among occupiers in Hyderabad shrunk to 51% in H1 2017, it recovered to 75% in the subsequent six month period. The share is however; lower than the 87% commanded in H2 2016
Speaking about the findings, Samson Arthur, Director – Hyderabad, Knight Frank said, “2017 had been a mixed bag for the Hyderabad real estate market. On the residential market front, launches, between July and December, hit a new low, largely due to RERA and its impending implementation. In contrast Sales in the residential sector fared relatively firm though they were marginally down compared to 2016. Ready-to-move-in houses were higher in demand during the second half of 2017, as consumers seemed to indicate a resistance to higher costs resulting out of GST burden on under construction apartments.
As for Office market, H2 2017 H2 i.e. July to December witnessed a new record of office space transaction over a six month period in Hyderabad. New completion, however, continued to be under stress as it couldn’t satisfy the increasing demand. As a result vacancy levels hit a new low and rentals continued to move north at 9% escalation over last year.”
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