- Increased supply, decreased sales is primary reason
- More projects filled with flats pricing Rs 80 lakh- Rs 1.5 crore
- Compared to other cities, Hyderabad has fewer affordable-range projects
- Developers focusing on high-end projects
- Announcing new projects without much market research
Hyderabad developers seem to have failed to accurately predict the market trajectory. They appear to have not studied factors like which segment projects are currently available in market, their sales, time taking for selling the existing stock, new projects coming up in the same segment among others. It seems that new projects are being launched upon finding adequate land. As a result, the number of unsold flats in the Hyderabad’s real estate sector is at least one lakh. Of these, about 72,000 are in gated communities. Buyers of triple bedroom flats in the suburbs are steadily declining due to high pricing.
The supply of flats has increased considerably in Hyderabad and it never harmed anyone as the number of investors too started growing significantly. But the problem is that nearly 53 per cent of developers in Hyderabad, are starting high-end apartments. The prices range from around Rs 80 lakh to Rs 1.5 crore. Nearly 10 per cent projects are costing between Rs 1.5 crore and Rs 2.5 crore, while ultra-luxury i.e. structures crossing Rs 2.5 crore budget form about 4 per cent. That is about 67 percent of builders are offering high budget flats. But, buyers are looking for affordable homes.
Bengaluru has the highest number of affordable housing projects
Oddly enough, even in Bangalore, where the IT sector is largely established, high-end constructions account for 34 per cent. But there are still about 23 per cent of builders who build flats under Rs 40 lakh even today. Around 26 per cent developers are constructing flats in the mid-segment i.e. between Rs 40 and Rs 80 lakhs which means that about 49 per cent of projects in Bengaluru are still affordable and mid-segment flats.
But in Hyderabad alone, only 32 per cent are building flats priced below Rs 80 lakh and a meagre 4 per cent builders are developing flats costing less than Rs 40 lakh. In cities like Pune and Chennai, flats are still available for between Rs 40 lakh and Rs 80 lakh. Flats are still available at affordable prices in the National Capital Region (NCR), Mumbai and Kolkata. But, we have more flats in the range of Rs 80 lakh and Rs 1.5 crore. Based on this, one can safely say that we are destroying the Hyderabad market ourselves.
51 percent are high-end flats
Most of the newly launched apartments in Hyderabad in recent times, are high-end projects. There are already several projects available in this segment. Again, new projects are being launched in the same segment. This can have a profound effect on sales in those projects. About 51 per cent have recently started projects worth between Rs 80 lakh and Rs 1.5 crore.
Another 16 percent of developers ventured into the next segment – the luxury and ultra-luxury projects. Surprising, such a bizarre trend is persisting only in Hyderabad which indicates that the developers in the city are taking up projects without conducting any field or market research to cater to the needs of genuine consumers. As a result, sales in Hyderabad are dropping significantly. Survey firms estimate that it will take as much as two years to sell the flats existing in the market and it could take much longer time to sell them.
