Hyderabad, the affordable realty market of metros

Thanks to a slew of affordable housing projects that mushroomed in Hyderabad, the 'City of Pearls' has emerged as the most affordable realty market among Indian metros, says a study done by global realty consultancy firm Knight Frank.

There has been an increase in demand for real estate in the last few months in the city. The fact that the residential property in Hyderabad is relatively undervalued presents vast opportunity for end-users and investors alike, said the Knight Frank report. According to the report, the affordable housing segment in Hyderabad got a push after 2008 when the industry saw a significant price corrections due to slowdown in the IT industry coupled with political uncertainty over Telangana.

As a result, the weighted average capital value of the residential properties in Hyderabad is estimated to be the lowest among the metro cities, the report said. Though the residential market in the city had become stagnant in the last two quarters of 2011-12, the city has bounced back due to affordable housing and various promotional offers.

The April-December 2012 period saw a number of launches by reputed developers totaling about 8,500 units and as of December 2012, around 65,000 residential units were under construction in various micro-markets of Hyderabad like Kukatpally, Madhapur, Kondapur, Gachibowli and Raidurgam.

Nearly 56 per cent of the absorption till December 2012 has been within the Rs 5 million (Rs 50 lakh) category, followed by Rs 5-7.5 million with 32 per cent. The clubbing together of these categories essentially denotes that the affordable and mid-end segment has been responsible for the absorption of a total 88 per cent of the residential units booked or sold.

On the pricing front too, nearly 51 per cent of the total residential units underway fall under the Rs 5 million category, which signifies that the customers in the mid-segment are the prime demand drivers of the residential market in the city, the report states.