Hyderabad bucks realty slowdown in H2
Realty prices across the nation during second half of 2017 eased, while Hyderabad and Ahmedabad withstood against odds as both the cities recorded price rise of three per cent and two per cent respectively on year-on-year (YoY) basis.
Hyderabad: Realty prices across the nation during second half of 2017 eased, while Hyderabad and Ahmedabad withstood against odds as both the cities recorded price rise of three per cent and two per cent respectively on year-on-year (YoY) basis. Other cities including Mumbai suffered price drop during the period and the weighted average price fall for the rest of the country is in the range of 3-7 per cent, said Knight Frank in its latest report. However, slowdown in IT and other industry verticals is impacting the realty space as technology sector’s share in the office market eased to 37 per cent in second half of 2017 from 39 per cent in H2 of 2016, according to Eighth edition of Knight Frank on July-December 2017.
“Mumbai and Ahmedabad had observed RERA, but it’s yet to be done in Hyderabad. RERA ambiguity created uncertainty in the market, however, sales have been steady in Hyderabad market,” Samson Arthur, Director (Hyd) at Knight Frank, told the media after releasing the report here on Wednesday. Though it was four per cent drop on YoY in office space, Hyderabad emerged with highest transactions for 3.34mn sft during second half of 2017. The share of IT/ITeS segment in office space recovered to 75 percent in second half of 2017 from 51 per cent in the first half.
New launches tank 84%
The report further observed that home launches hit an all-time low as only 940 units entered the market indicating 84 per cent drop when compared with H2 of 2016. Sales volume also ease by 13 percent during H2 of 2017.
New launches of housing units were 3,511 in 2017 from 11,600 in 2016, while sales during the period fell to 14,243 from 15,500. Hyderabad recorded drop in unsold inventory as the number of housing units were 17,35 in 2017 from 28,088 in 2016.
“2017 was a mixed bag for the Hyderabad real estate market. Launches in the residential market during July-December hit a new low owing to RERA, its impending implementation, lack of clarity on GST and shortage of ready to move in homes brought down sales during the period. However, sales fared relatively well though they were marginally down when compared with 2016 sales. Ready-to-move houses were in demand as consumers seemed to indicate a resistance to higher costs resulting out of GST burden on apartments under construction.
In overall, new launches down by 84 per cent and sales fell 13 per cent. Coming to positive side of the coin, Hyderabad recorded price rise and unsold inventory fell by 38 per cent,” further adds Arthur. Space of new completion dropped by 46 per cent to 3.25mn sft in 2017 from 6mn sft in 2016. The volume of transactions eased four percent to 5.67mn sft in 2017 from 5.92mn sft in previous year.
“Office space segment during July-December witnessed a new record of office space transaction over a six-month period. New completions however, continued to be under stress as it couldn’t satisfy the increasing demand. As a result, vacancy levels hit a new low and rentals continued to move upwards at nine per cent escalation when compared with H2 of 2016,” said Arthur.