Hyderabad: The Hyderabad residential real estate market has shown resilience in 2024, despite facing some challenges due to increased regulatory scrutiny following the formation of the Hyderabad Disaster Response and Asset Protection Agency (HYDRAA).
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According to data from Square Yards, the city recorded a total of 75,512 residential transactions, which includes apartments, plots, and villas, reflecting a marginal increase from the 74,495 transactions in 2023. While the number of transactions saw slight growth, the overall value of registered home sales experienced a more significant surge, rising by 13% to Rs 45,190 crore during the same period.
Slowdown in Transactions Due to HYDRAA Impact
Despite the overall positive numbers, the growth in the number of transactions slowed down compared to previous years. The establishment of HYDRAA in July 2024 seems to have played a major role in this slowdown. Homebuyers have become increasingly cautious, focusing more on project compliance and the legal standing of properties before making decisions. HYDRAA’s scrutiny of residential projects has encouraged a more meticulous approach to evaluating properties, which has delayed many transaction closures.
As a result, the fourth quarter of 2024 saw a significant decline in transactions, with only 15,941 residential units being registered, marking a 12% year-on-year decrease compared to the same period in 2023.
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Expert Opinions on the Market Outlook
Debayan Bhattacharya, Principal Partner & Sales Director at Square Yards, weighed in on the current situation, acknowledging the market’s resilience despite these challenges. He emphasized that, while the fourth quarter witnessed a dip in transaction volumes, the yearly performance remained positive. The increase in total registrations compared to 2023 indicated a steady market growth.
“Hyderabad’s property market has demonstrated significant resilience and growth post-pandemic, with sustained momentum continuing through 2024. The fourth-quarter decline is a temporary effect caused by HYDRAA’s impact on consumer sentiment. However, the overall yearly data tells a more positive story,” Bhattacharya stated.
He also noted that government clarifications ensuring that projects with prior approvals would remain unaffected by HYDRAA have been crucial in maintaining market stability. Developers are adapting to the new compliance requirements and recalibrating their customer outreach strategies, which is slowly restoring consumer confidence.
Long-Term Growth Prospects
Bhattacharya remained optimistic about the future of Hyderabad’s real estate market, noting that, although the current slowdown may be temporary, it would pave the way for more sustainable growth. The introduction of stricter regulations, such as those enforced by HYDRAA, is expected to curb illegal encroachments and foster better compliance in the industry, ultimately benefiting the market in the long run.
“The impact on sentiment will be short-lived,” Bhattacharya added. “In the long run, these developments will promote sustainable growth and enhance the city’s real estate market integrity.”
Continued Demand for Premium Properties
As Hyderabad rapidly becomes a leading hub for IT and global business process outsourcing (GCC), the demand for premium residential properties remains strong. The city’s evolving infrastructure and burgeoning economic opportunities continue to make it an attractive destination for both local and international homebuyers.
Experts predict that despite the short-term disruptions, residential demand will remain robust, especially for high-end properties that cater to the growing professional class. The city’s expanding economic base and infrastructure upgrades, including better connectivity and amenities, are expected to sustain the demand for residential real estate.
Hyderabad’s residential real estate market has undoubtedly faced a slowdown in transaction volumes in recent months, driven largely by the scrutiny introduced by HYDRAA. However, the overall growth in value and the market’s adaptability in adjusting to regulatory changes suggest a promising outlook for the future. As the city continues to grow as an IT and business hub, its real estate market is likely to maintain its resilience and attract sustained interest from homebuyers.
