High demand for luxury homes fueled price rise in West Hyderabad

Hyderabad: With world-class infrastructure, West Hyderabad caters the luxury housing needs of the high net worth individuals (HNIs) and non-resident Indians (NRIs). The prices of residential units here are skyrocketing due to the growing demand for larger spaces and luxurious amenities. City-based real estate developers are also in a competitive spirit, striving to deliver the most lavish houses in this zone.

“The housing demand in Gachibowli, Kondapur, and other areas of West Hyderabad is not just driven by the IT professionals. All the rich and elite families across the city and neighboring districts are either buying a house or investing in a residential property in this zone,” stated V Rajashekar Reddy, President of Credai (Confederation of Real Estate Developers Association of India) Hyderabad.

“The demand for larger spaces and luxury homes led to the price escalation in West Hyderabad, particularly in Gachibowli and Kondapur. Earlier, we used to see residential units of size not more than 2,500 sq ft. These days, there are flats of 16,000 sq ft also. This part of the city is developing vertically and horizontally,” said K Raja Reddy, President of Greater West City Builders Association (GWCBA).

Predicting the future prospects of the real estate market in West Hyderabad, he said: “Land rates have already skyrocketed in this zone. It is clearly evident from the record sale of Neopolis layout in Kokapet, fetching above Rs 100 crore per acre in the recently held e-auctions. Soon, land may be sold out in terms of sq ft. This rate hike will inevitably reflect on the prices of flats in these localities.”

Echoing similar views, V Srinivas, Vice-President of Telangana Builders Federation (TBF), noted that housing prices have surged drastically in the IT corridor and Gachibowli Financial District in tandem with land rates. At the cost of a 2BHK flat in these areas, people can purchase a duplex villa in other parts of the city. Consequently, middle-class home buyers have shifted their focus away from West Hyderabad.

According to the latest report by real estate consultancy Anarock Group, Gachibowli and Kondapur are the top micro-markets in India witnessing the highest average residential price hikes at 33 per cent and 31 per cent respectively between the first 10 months of 2023 and the same period in 2020. Miyapur is another top micro-market in the city experiencing substantial average price rises over the last three years.

As of October 2023, the average residential prices stand at approximately Rs 6,355 per sq ft in Gachibowli, compared to Rs 4790 per sq ft in the corresponding period of 2020. In Kondapur, there has been a 31 per cent average price rise from Rs 4650 per sq ft in October-end 2020 to Rs 6090 per sq ft in October-end 2023.

Miyapur has witnessed a 28 per cent increase in average prices during this period from Rs 4,250 per sq ft in October-end 2020 to Rs 5,420 per sq ft in October-end 2023. Due to strong housing demand, the average residential prices in these areas of the city have significantly grown over the three-year period.

“Among the top seven cities in India, the key areas in the IT-led cities Hyderabad, Bengaluru and Pune saw the highest surge in average prices,” says Prashant Thakur, Regional Director & Head - Research, Anarock Group. “Hyderabad also shows a higher scope of price appreciation because the city's average prices in pre-pandemic period were relatively lower than the prices in Bengaluru's IT/ITeS hubs.”

He adds, “By the end of October, marking the end of the festive season, typically denotes the culmination of the year's peak housing sales period. As of 10-month period in 2023, the average prices in Hyderabad's key micro markets are almost at par with Bengaluru's IT-led housing hotspots. Bengaluru’s Whitefield comes in third with a 29 per cent jump in this three-year period from Rs 4,900 per sq ft to Rs 6,325 per sq ft.”