Hyderabad Real Estate on the Brink of Collapse?

[Undilaemanchikalam]

 

Sky-high Prices + Over-Supply due to massive number of new property launches in the last 3 years have brought the city’s red hot market to a stagnation point…

 

Concerns are being raised over the viability and sustainability of the real estate in Hyderabad, as many experts feel the market may start collapsing by early 2025..

CV Reddy, Director of Aparna Constructions – among Hyderabad’s top 3 developers by volumes – himself has been quoted saying Hyderabad real estate has slowed down in the past few months of 2023 and 2024

Deccan Chronicle quoted Dr Y. Kiron, CEO of SuchirIndia Group – another well known developer in Hyderabad – predicting that the real estate market will stagnate, starting mid of 2024

According to Anarock Property Consultants – among the country’s leading property brokers – builders in Hyderabad are sitting on UNSOLD INVENTORY of 1,28,535 units as of 30th September 2023 – the HIGHEST for any city in Indiaand almost 4 to 5 TIME MORE than more matured & bigger markets like Bangalore, Chennai and Pune.

In just 3 months of June to September alone, while 8152 new units were launched, only 6735 units were sold, clearly indicating the over-saturation / over-supply in the market – and this will only make it harder for you to resell property in the next few years!

And with rapid & non-stop increase in prices by as much as 3 to 5 times in just 2 to 3 years in some areas, buying a property in Hyderabad has become an unaffordable luxury for most people!

Astronomical land prices have made it absolutely pointless to buy land as rates are both unaffordable and from the already peak levels today, they cannot multiply by 2 or 3x anymore – the way they have in the last few years…

And so a combination of both SKY-HIGH PRICES (Hyderabad is now the 2nd most expensive market in India after Mumbai) and OVER-SUPPLY of over 1,20,000+ unsold apartments (almost 5 times more than that of Bangalore, Pune, etc) has blown the fuse on Hyderabad real estate’s golden rush since 2017.

(while above only talks of apartments, the condition of plotted layouts is far worseas that is a more unorganised market with lot more supply, running into the lakhs or more)

Only those who urgently need a home to live in themselves (i.e. for self-occupation) should buy a property at the current rates – since they have no choice or cannot wait – but for anyone looking to invest to make money, this is probably the WORST TIME to be buying into Hyderabad.

Here are 7 reasons why…

While we recommend you to read the article in order shown below, if you want to skip directly to a particular section, please click on the section of your choice below…

Reason 1 :
Over-Supply (too many projects everywhere!)

Reason 2 :
Over-Priced & Unaffordable (exorbitant prices!)

Reason 3 :
No Limit on Construction (over-burdened infrastructure)

Reason 4 :
Unequal Growth & FOMO (Fear of Missing Out)

Reason 5 :
End of Work from Home + waning NRI Euphoria

Reason 6 :
GO 111 (misguided buyers being taken for a ride)

Reason 7 :
Dangerous Short Term Trends (Sale of Undivded Share of Land etc)

 

Oversupply – Too many projects everywhere!

 

 

5 times more UNSOLD Units in Hyderabad than any other city in India…

 

 

By 2024, Hyderabad could be sitting on an absurd number of excess, unsold homes – at least 4 to 5 TIMES MORE than the annual demand!

 

In just 1 year alone (Jan to Dec 2022), over 80,000 new apartment units were approved by TS-RERA across Hyderabad.

However, the annual sales / absorption of residential properties in Hyderabad is just 10,000 to 14,000 units – which means in 1 year alone, a staggering 65,000 new excess homes have been added to the city…

(infact unsold inventory went from just 11,918 units in December 2021 upto 58,535 by December 2022!)

And with another 60,000 to 70,000 new apartments in the pipeline for 2023 alone (and a lot more over the next 2 years), this supply-demand gap will only worsen further, adding to the already worrying oversupply in the city.

And though builder’s so far managed to artificially create hype / demand to increase prices over the last few years, this oversupply is so bad that eventually, they will start cutting prices in desperation to sell – leading to either stagnation or worse, a big fall in prices.

Take China for example, where over-construction led to ghost cities with plenty of newly built apartments lying empty with no one to occupy them – Hyderabad is going to face a similar situation soon!

With over-supply, sales have come down drastically in 2nd quarter of 2023 and this along with excess inventory will lead to delayed & stressed projects, which in turn will lead to stagnation or reduction in prices in the long run.

(and while above data is only covering apartments, you can only imagine how bad it must be incase of plotted layouts which are in the 100s of 1000s in all directions of the city, stretching as far as 120 Kms away from core areas!)

SUMMARY

If you end up buying properties at current high prices with such an oversupply in the market, you will struggle to sell them in the future and even if you manage to find a buyer, you won’t have made much profitable there are more properties than buyers in market – making it easy for buyers to bargain heavily and you also end-up competing with builders who are desperate to sell this excess unsold stock, maybe at a discounted rate!

 

Over-Priced & UnaffordableProperties

 

 

Abnormal & Non-Stop Increase in Prices that is both Unsustainable & Unhealthy!

 

 

Hyderabad is now the 2 most expensive housing market in India, second only to Mumbai & more expensive than Delhi-NCR itself!

 

Due to non-stop increase in prices since 2017, Hyderabad has become unaffordable for most of the buyers – leading to a slump in new sales since early of 2024.

In India and most parts across the world, a typical real estate boom cycle usually lasts between 3 to 4 years – but incase of Hyderabad, prices have been increasing for 6 years in a row which is very UNUSUAL  / ABNORMAL and definitely not unsustainable or healthy – clearly indicating a bubble that will soon burst.

Hyderabad’s average price per SFT is Rs 5900 to Rs 6100, much higher than other metro cities like :

And so from the current high levels, prices cannot continue to grow at the same pace as its already quite expensive…

Going forward, you can only expect a moderate increase of just 5% to 7% per annum – unlike the 15% to 30% per annum jumps seen in the last few years!

Buying a home has now become a luxury in Hyderabad and hence buyers are waiting for prices to cool-off and many who were earlier keen on buying property for investment, are now wondering if the market’s getting a bit too unreal!

(moreover, the most recent price increase has been more due to a spike in the cost of construction material after Covid-19 outbreak due to shortage of material & labour, and not necessarily due to increase in demand for homes)

SUMMARY

With such abnormally high prices, if you buy anything in Hyderabad today, you  will be lucky if you make anymore than 5% to 7% ROI per annum – the golden days of money doubling every couple of months or a year are long over / behind us now!

[Assam_Bhayya]

 

[dreamchaser]

@Sonu_Patel Looks like this is similar to US housing market in major cities like Austin,Tampa,Atlanta

[pichhipullayya]

Thank you Gumpu Mestri..

 

[aimodel]

alreaaady collapsed 

[Hitman]

32 minutes ago, dreamchaser said:

@Sonu_Patel Looks like this is similar to US housing market in major cities like Austin,Tampa,Atlanta

Tampa is still not in this category man. it has healthy growth. 

[kittaya]

Hyd lo over prices .. apartment shell kattesi isthe .. manam interior manam construct chesukovaali anta .. roo much dandhaa

[paaparao]

49 minutes ago, kittaya said:

Hyd lo over prices .. apartment shell kattesi isthe .. manam interior manam construct chesukovaali anta .. roo much dandhaa

mottam andhra antha alage unnayi. malli sky high prices. towns lo kuda 3 bhk villa ki 1 cr minimum asking. 

[manadonga]

Its due to too much price and black money is curbed slowly. It will be couple of months it will be back but mostly on banglore highway

[kittaya]

3 hours ago, paaparao said:

mottam andhra antha alage unnayi. malli sky high prices. towns lo kuda 3 bhk villa ki 1 cr minimum asking. 

Agreed ... 

[kittaya]

3 hours ago, manadonga said:

Its due to too much price and black money is curbed slowly. It will be couple of months it will be back but mostly on banglore highway

Otp.. ppl bought apartments even they didn't get layout plan approved , they don't have building approval , they don't have land registration... 

 

Based on OTP , and pre- construction offers .. making gimmick with bank, they pool money .. and do the business.. 

 

Some builders .. are jumping away with money 

[Mediahypocrisy]

It's not applicable to  all the real-estate....prime areas lo ekkada rates taggaledu..increased more...open plots aite 5 paise kuda taggaledu...

Only new builders kattina chendalapu cheap quality flats matram not selling...

Karimnagar lanti 2 tier city lo kuda 200 syd villa 1.5 cr cheptunnaru still.. media gallu hypocrites...damal anta...ala anevadu ekkada taggindo kuda chupiste kone vallu chala Mandi unnaru

[verrigadu]

2 hours ago, Mediahypocrisy said:

It's not applicable to  all the real-estate....prime areas lo ekkada rates taggaledu..increased more...open plots aite 5 paise kuda taggaledu...

Only new builders kattina chendalapu cheap quality flats matram not selling...

Karimnagar lanti 2 tier city lo kuda 200 syd villa 1.5 cr cheptunnaru still.. media gallu hypocrites...damal anta...ala anevadu ekkada taggindo kuda chupiste kone vallu chala Mandi unnaru

This oversupply issue especially around Hyderabad is popping up every 2 months or so.

This is like Youtube's click bait titles: These Prestitutes might be blackmailing the Real Estate developers with scary reports like this.

[chammakchandra]

13 hours ago, Undilaemanchikalam said:

 

Sky-high Prices + Over-Supply due to massive number of new property launches in the last 3 years have brought the city’s red hot market to a stagnation point…

 

Concerns are being raised over the viability and sustainability of the real estate in Hyderabad, as many experts feel the market may start collapsing by early 2025..

CV Reddy, Director of Aparna Constructions – among Hyderabad’s top 3 developers by volumes – himself has been quoted saying Hyderabad real estate has slowed down in the past few months of 2023 and 2024

Deccan Chronicle quoted Dr Y. Kiron, CEO of SuchirIndia Group – another well known developer in Hyderabad – predicting that the real estate market will stagnate, starting mid of 2024

According to Anarock Property Consultants – among the country’s leading property brokers – builders in Hyderabad are sitting on UNSOLD INVENTORY of 1,28,535 units as of 30th September 2023 – the HIGHEST for any city in Indiaand almost 4 to 5 TIME MORE than more matured & bigger markets like Bangalore, Chennai and Pune.

In just 3 months of June to September alone, while 8152 new units were launched, only 6735 units were sold, clearly indicating the over-saturation / over-supply in the market – and this will only make it harder for you to resell property in the next few years!

And with rapid & non-stop increase in prices by as much as 3 to 5 times in just 2 to 3 years in some areas, buying a property in Hyderabad has become an unaffordable luxury for most people!

Astronomical land prices have made it absolutely pointless to buy land as rates are both unaffordable and from the already peak levels today, they cannot multiply by 2 or 3x anymore – the way they have in the last few years…

And so a combination of both SKY-HIGH PRICES (Hyderabad is now the 2nd most expensive market in India after Mumbai) and OVER-SUPPLY of over 1,20,000+ unsold apartments (almost 5 times more than that of Bangalore, Pune, etc) has blown the fuse on Hyderabad real estate’s golden rush since 2017.

(while above only talks of apartments, the condition of plotted layouts is far worseas that is a more unorganised market with lot more supply, running into the lakhs or more)

Only those who urgently need a home to live in themselves (i.e. for self-occupation) should buy a property at the current rates – since they have no choice or cannot wait – but for anyone looking to invest to make money, this is probably the WORST TIME to be buying into Hyderabad.

Here are 7 reasons why…

While we recommend you to read the article in order shown below, if you want to skip directly to a particular section, please click on the section of your choice below…

Reason 1 :
Over-Supply (too many projects everywhere!)

Reason 2 :
Over-Priced & Unaffordable (exorbitant prices!)

Reason 3 :
No Limit on Construction (over-burdened infrastructure)

Reason 4 :
Unequal Growth & FOMO (Fear of Missing Out)

Reason 5 :
End of Work from Home + waning NRI Euphoria

Reason 6 :
GO 111 (misguided buyers being taken for a ride)

Reason 7 :
Dangerous Short Term Trends (Sale of Undivded Share of Land etc)

 

Oversupply – Too many projects everywhere!

 

 

5 times more UNSOLD Units in Hyderabad than any other city in India…

 

 

By 2024, Hyderabad could be sitting on an absurd number of excess, unsold homes – at least 4 to 5 TIMES MORE than the annual demand!

 

In just 1 year alone (Jan to Dec 2022), over 80,000 new apartment units were approved by TS-RERA across Hyderabad.

However, the annual sales / absorption of residential properties in Hyderabad is just 10,000 to 14,000 units – which means in 1 year alone, a staggering 65,000 new excess homes have been added to the city…

(infact unsold inventory went from just 11,918 units in December 2021 upto 58,535 by December 2022!)

And with another 60,000 to 70,000 new apartments in the pipeline for 2023 alone (and a lot more over the next 2 years), this supply-demand gap will only worsen further, adding to the already worrying oversupply in the city.

And though builder’s so far managed to artificially create hype / demand to increase prices over the last few years, this oversupply is so bad that eventually, they will start cutting prices in desperation to sell – leading to either stagnation or worse, a big fall in prices.

Take China for example, where over-construction led to ghost cities with plenty of newly built apartments lying empty with no one to occupy them – Hyderabad is going to face a similar situation soon!

With over-supply, sales have come down drastically in 2nd quarter of 2023 and this along with excess inventory will lead to delayed & stressed projects, which in turn will lead to stagnation or reduction in prices in the long run.

(and while above data is only covering apartments, you can only imagine how bad it must be incase of plotted layouts which are in the 100s of 1000s in all directions of the city, stretching as far as 120 Kms away from core areas!)

SUMMARY

If you end up buying properties at current high prices with such an oversupply in the market, you will struggle to sell them in the future and even if you manage to find a buyer, you won’t have made much profitable there are more properties than buyers in market – making it easy for buyers to bargain heavily and you also end-up competing with builders who are desperate to sell this excess unsold stock, maybe at a discounted rate!

 

Over-Priced & UnaffordableProperties

 

 

Abnormal & Non-Stop Increase in Prices that is both Unsustainable & Unhealthy!

 

 

Hyderabad is now the 2 most expensive housing market in India, second only to Mumbai & more expensive than Delhi-NCR itself!

 

Due to non-stop increase in prices since 2017, Hyderabad has become unaffordable for most of the buyers – leading to a slump in new sales since early of 2024.

In India and most parts across the world, a typical real estate boom cycle usually lasts between 3 to 4 years – but incase of Hyderabad, prices have been increasing for 6 years in a row which is very UNUSUAL  / ABNORMAL and definitely not unsustainable or healthy – clearly indicating a bubble that will soon burst.

Hyderabad’s average price per SFT is Rs 5900 to Rs 6100, much higher than other metro cities like :

And so from the current high levels, prices cannot continue to grow at the same pace as its already quite expensive…

Going forward, you can only expect a moderate increase of just 5% to 7% per annum – unlike the 15% to 30% per annum jumps seen in the last few years!

Buying a home has now become a luxury in Hyderabad and hence buyers are waiting for prices to cool-off and many who were earlier keen on buying property for investment, are now wondering if the market’s getting a bit too unreal!

(moreover, the most recent price increase has been more due to a spike in the cost of construction material after Covid-19 outbreak due to shortage of material & labour, and not necessarily due to increase in demand for homes)

SUMMARY

With such abnormally high prices, if you buy anything in Hyderabad today, you  will be lucky if you make anymore than 5% to 7% ROI per annum – the golden days of money doubling every couple of months or a year are long over / behind us now!

No one selling for less.. have to c how long these ppl will hold prices!!! Especially middle man brokers have become a headache in Hyd  real estate 

[Pavanonline]

12 hours ago, aimodel said:

alreaaady collapsed 

Ekkada?