The Hyderabad residential market was witness to marginal decline during the second half (H2) of the year 2016 and had to bear the impact of demonetization.
Real estate consultancy Knight Frank India in its half yearly report on India Real Estate said new launches witnessed a growth of 3 per cent while sales dropped by 6 per cent during H2 2016, compared with H2 2015.
The year 2016 would have been marginally better than 2015 had it not been for the demonetization, the report said.
Fall in sales
Gulam Zia, Executive Director – Advisory, Retail and Hospitality, Knight Frank India, said, “The Hyderabad residential market withered over the last five years after peaking in 2012. While the city observed more than 22,700 units in new launches and 19,000 units in sales during 2012, these numbers have fallen by 49 per cent and 21 per cent respectively since then.”
“The reduction in new launches and relatively stable sales volume helped in rebalancing the market to a great extent as the unsold inventory level dropped to its lowest level in the last six years,” he said.
The unsold inventory levels dropped to its lowest level in the last six years to 28,088 units in H2 2016. Since demonetization, sales of residential units plunged by 40 per cent to 3,034 units.
West Hyderabad remains the preferred location, largely because buyers have a preference for ready-to-move-in properties closer to the office hubs with 60 per cent of home sales. While the Hyderabad’s premium market experienced 56 per cent year-on-year slump in launches in H2 2016, the office market witnessed its highest yearly office space transaction in 2016.
The Hyderabad office market witnessed nearly 6 mn sq ft of office space being transacted during the year, up 31 per cent over 4.6 mn sq ft mark achieved in 2015.