Hyderabad continues price rally in Q4; Bengaluru, Chennai show signs of overall revival: PropTiger report

365telugu.com online news,Hyderabad,January 11, 2021: After two quarters of a lull, housing markets in the southern part of the country – Bengaluru, Chennai and Hyderabad– showed signs of revival, with new launches as well as sales numbers showing an improvement in the October-December period of 2020.“The pace of recovery in the southern markets can well be gauged from the fact that the three cities of Bengaluru, Chennai and Hyderabad, have accounted for 43% of the launches nationally, in the last quarter, while also accounting for 29% of the sales nationally, during the same period. The affordable housing segment has been the leading segment in all three cities. Special mention has to be made of Hyderabad which has displayed price growth at a time when the opposite trend is being seen in most other markets. Apart from its commercial success, Hyderabad’s real estate market is also benefiting from its new and upcoming world-class infrastructure projects and the quality of life it promises to the residents,” says Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger.com

Three southern cities contribute 43% to overall launches

While the quarter saw the highest number of units being launched in Hyderabad, a market that has practically defied national trends to see value appreciation year after year, the highest sales numbers in the region was achieved in Bengaluru, India’s information capital.Together, these three cities contributed 43% to the overall launches in the December quarter. They also contributed 29% to the national sales numbers during this period.

New launches in Q4, 2020

Home sales in Q4, 2020

In terms of sales as well as new supply, all three cities underwent an increase when compared to the July-September period in 2020.In Bengaluru, the affordable housing segment (units priced up to Rs 45 lakh) contributed 27% and 25% to launch and sales numbers, respectively. In Chennai, this segment contributed 38% and 37% to launch and sales numbers, respectively. In Hyderabad, this segment contributed 35% and 17% to launch and sales numbers, respectively.At the center stage of the office activity, localities of Hyderabad west had the highest share in both, supply and demand. In Chennai, on the other hand, Mogappair and Perumbakkam in Chennai west and Sholinganallur on OMR emerged on top in terms of sales. In Bengaluru, while the demand was concentrated in localities such as Varthur, Whitefield, Begur, Budigere and Krishanarajapura, the new supply was seen in localities of north Bengaluru such as Budigere Cross, Kogilu and Yelahanka.

Hyderabad has the lowest inventory overhang nationally

Even though Chennai has the lowest unsold stock as on December 31, 2020, Hyderabad has the lowest inventory overhang nationally, at 29 months. Unsold inventory in Hyderabad has increased significantly to the tune of 19% as compared to the previous quarter, due to an influx of new supply in this quarter. In Chennai, too, the unsold stock showed an increase of 5% year-on-year while Bengaluru saw an 11% decline in the unsold stock during the same period.Inventory overhang is the estimated period developers would take to sell the existing stock, keeping in view the current sales velocity.

Unsold stock: City-wise break-up

Also note here that the inventory overhang has increased in all these cities since 2019. At the end of December 2019, the inventory overhang was 25 months in Bengaluru, 26 months in Chennai and 13 months in Hyderabad.  

Price growth continues in Hyderabad despite demand slowdown

Despite tremendous pressure because of a demand slowdown nationally, the City of Nizams continues to buck the trend to witness consistent price growth. In Q4, too, the average rate of newly-launched projects in this pharmaceutical hub increased 5% year-on-year. Due to a consistent increase in average rates, property prices are the highest in Hyderabad currently. Bengaluru and Chennai also witnessed a 2% annual increase in average values.

Average price in southern cities