West Hyderabad: Rise in unsold stock a big worry
Western part of city is witnessing unrealistic rise in the prices of land and residential units
Hyderabad: Having a range of tech companies and corporate offices, Western part of the city is the most happening suburb in Hyderabad. Growing housing demand has led to unrealistic price hike of the residential properties in this zone. The skyrocketing rates of flats in apartments are giving nightmares to middle-class individuals who wish to buy a home near their workplace.
Unable to purchase a property here, many junior and mid-level employees of IT companies prefer to live in rented accommodation for years and decades. It is becoming almost an impossible task for a salaried person to realise the dream of an own house in this zone. The real estate builders and developers are in a position that they can neither reduce the price nor hold the unsold inventory for long time.
As per Knight Frank's Residential Market Report for January-June period, Hyderabad has seen 195 per cent rise in unsold inventory from 4,037 housing units in H1 2020 to 11,918 units in H1 2021. Western part of the city has witnessed 227 per cent increase in unsold inventory with a maximum of 7,373 housing units. The age of inventory is 7.2 quarters, while it may take 3.3 quarters to sell them.
The growth in unsold inventory levels in Hyderabad during H1 2021 is largely contributed by 16,712 new launches, of which 64 per cent is from the Western part of the city. The existing unsold inventory is divided by the average sales velocity of the preceding eight quarters to arrive at the quarters required to sell the units for the current quarter.
The home buyers are shocked to see the rates of residential flats in West Hyderabad starting from Rs 8,000 per sq ft at a gated community having regular amenities. The price goes up depending up on the floor and size. Apart from registration, there are infrastructure charges and other costs involved while purchasing the flat. Afraid of the price burden, middle-class home buyers prefer other zones over West.
However, builders are confident that the demand for housing in West Hyderabad will be intact even in future due to more and more commercial space coming up here. Sumadhura Group Chairman Madhusudhan G said, "Buying a property in West Hyderabad is a safe bet as one may get better return on investment. Most of the NRIs and techies are investing in this hotspot region of the city."
Credai Hyderabad General Secretary V Rajasekhar Reddy said, "The sales volumes are up based on demand. There is some negativity also. Growth is seen only in one direction. So, we are insisting the government on sustainability. There must be some guidance from the government as well. The builders may not have vision. Government authorities must involve and suggest focusing on all zones of the city."
"The government shall create investment opportunities in all zones. It's happening, but takes time. Land issues are getting cleared, real estate activity restarted in Kompally and Medchal. Housing sales are picking up in Uppal and Ghatkesar. In next two-three years, Shamrpet area in Northern part will flourish like anything," he anticipated.