Indian economic slowdown: Will it affect the Hyderabad real estate
Posted: Oct 13, 2019
The recent slowdown in the Indian economy has been a matter of concern for the government and the general population. But will this slowdown affect the realty industry of Hyderabad? Since the inception of Telangana in 2014, Hyderabad had constantly seen a growth spurt in the real estate sector. It was since 2008, that Hyderabad had experienced a slump as the demand for a separate Telangana state was on the cards. There was a very slow investment flow during this time that left a lot of potential for economic growth. It was since 2018 that Hyderabad has experienced an investment burst and it has reportedly attracted three times as much private equity than the previous three-year period.
Hyderabad has seen a massive growth economically due to a resilient real estate industry.
At a time when most other metro cities have gone through a major real estate stagnancy, Hyderabad has kept its hold strong over the real estate sector and has grown in numbers year after year. According to a recent report, over the past four years, investments in Hyderabad have surged more than five times. It has escalated to nearly Rs 101 billion over the past four years.
The real estate industry in this city is strong owing to several developmental factors like advanced infrastructure, policy reform and political strength. Between the years 2008-2013, newer projects launched in the residential sector have experienced an annual decline of around 11%. But with the formation of Telangana state in 2014, the new government aggressively started pitching in for investments that saw a sharp turnaround in residential project launches that increased by 16% annually till 2018.
It is undoubtedly a fact that the recent development and economic growth that Hyderabad is basking in is primarily due to the many multinational companies that were drawn to the city and the sustainable living condition for the residents that are better than many metro cities. Besides the current Government has taken a very strong stand in the real estate business of Hyderabad. They have introduced pro-industry measures such as the single-window clearance for building permissions and more recently introduced a plan to penalise officers delaying legitimate building projects. There are also significant roles played by some politicians who pitched hard for Hyderabad as the next IT destination city and drew in different multinational companies by making good on their promises.
There has been an increased leasing activity in the office space since the past few years that have positioned Hyderabad as the most active commercial market in the southern part of India. This increased IT boom has led to Hyderabad’s growth and development.
That being said the big players of the Hyderabad real estate industry feel that the real estate sector will continue to grow in the coming years. Several of them have also stated that in spite of the sluggish Indian economy in the past 18 months, there has been a good sales momentum in the projects featured with a good location and price points.
2.5 million Sq ft of office space was leased out last quarter. This means that more commercial investments and expansion means an increased demand for residential apartments. It has also been observed that real estate prices in Hyderabad are comparatively cheaper than most metro cities and small-time investors are considering real estate as a better investment option because the stock market is lagging behind and price of gold is hitting the roof.
With a huge absorption of commercial space and rapid infrastructural development, the demand for housing space in Hyderabad as compared to other neighbouring metros is at an all-time high. As of now, the Hyderabad real estate is growing and there no indications of any challenges so far.
Investing in real estate is always a profitable option. Considering most developmental factors in Hyderabad, it can be said safely that the city is becoming an attractive real estate market since the past few years for both residential and commercial development.
Even if a nation is facing an economic slump, the Government finds out ways to revive the slow economic growth.
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