Hyderabad, along with Mumbai and Pune, will be driving growth in the real estate sector in 2024.
The real estate sector is observably one of the most fragmented sectors in the country, engaging a large workforce and contributing around 7% to Indian GDP. Metro cities such as Mumbai and Delhi-NCR are gaining maximum traction due to being a hub for businesses. However, compared to other competitive metro markets, Hyderabad is set to become the most promising real estate destination in the country. As per a recent industry report, Hyderabad, along with Mumbai and Pune, will be driving growth in the real estate sector in 2024. The following are some of the key factors that will propel the city’s real estate to the next level in 2024.
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Growing Corporatization of Employment Segment: Over the recent years, Hyderabad has been growing rapidly with strong organized sector employment driving growth in the city. Driven by a booming IT sector and excellent infrastructure, Hyderabad has become a real estate hotspot for both domestic and international investors. The expansion of the technology sector and industrialization in Hyderabad has led to a predominant concentration of residential development near the key office micro markets of the IT Corridor and the extended IT Corridor in the western part of the city. In fact, Hyderabad is leading the technology revolution in the state. As per Government reports, the state recorded a growth of 31% in IT and IT-enabled services exports in 2022-23. Over the recent years, having established itself as the hub of manufacturing, IT, and ITeS companies, the city has been witnessing a greater appreciation of property, an increase in foreign direct investment, the growth of a more economically empowered citizenry, and the creation of a more aspirational society.
New project rollout and improving completion rates: Over the past few years, Hyderabad has had a strong project rollout by nearly 10% over the 2019-20 financial year. The unsold inventory in Hyderabad stood at over 35,000 units in the financial year 2020-21, yet the city has seen a healthy number of new take-offs. The ease of doing business in Hyderabad/Telangana is aided by proactive initiatives like TS-iPass and ICT Policy that have benefitted the city’s real estate market. Most significantly, housing projects in Hyderabad have witnessed 74% completion rate. Moreover, the city is expecting to have more than 1.3 lakh housing units in next two to three years. These factors will drive growth in revenue realized from property sales in 2024.
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Demand for commercial & office spaces – A growth driver: Hyderabad ranked second in net office absorption in 2023 with a 21% share, absorbing 4.03 million square feet. The city added more than 8.2 million square feet of new office space 2023, accounting for 34% of new office space in India’s 7 major markets. Exceptional growth in commercial real estate net absorption was observed in Q3 FY22, driven by the expansion of the IT and BPM industry. Simultaneously, the city is also experiencing rapid growth in supporting commercial realty projects.
Infrastructure development: The rapid development of the Outer Ring Road and the sprawling metropolitan area not only connects the major economic zones but also positions Hyderabad as an attractive investment destination. Acting as a bustling commercial hub, the city attracts business and creates a vibrant real estate scene. On the back of Telangana’s heavy investments in infrastructure such as drainage systems and improved ring roads, Hyderabad emphasizes its commitment to integrated urban living. Government initiatives such as the TS-iPASS Act and regulatory improvements such as RERA provide more certainty to investors.
Changing perspective around advance technology and sustainability in real estate: Hyderabad is well into the smart city mode. With the adoption of advance technologies like AI and IoT, the real estate sector is transforming the perception and quality of experiencing real estate in the city. The segment is more sophisticated, sustainable, facilitates smart decision-making, and giving seamless customer experience. As technology evolves, expect more innovative solutions that shape the future of this dynamic industry. The city is adopting eco-friendly materials, energy-efficient designs, and renewable energy sources to improve the quality of life of its residents. Developers have begun working towards obtaining LEED and IGBC certifications.
With developers adapting to changing consumer preferences for more feature rich, luxurious, and spacious residences, as well as increasing focus on sustainable and innovative living solutions, the property segment is evolving rapidly across India. However, specific factors as discussed will cumulatively impact the city’s real estate sector, making Hyderabad one of the most definitive destination for purchasing and investing in property in 2024 and beyond.
