Hyderabad: Post Unlock 2.0, Hyderabad’s real estate market is on the road to recovery.
The city reported a 272% increase in home sales, while a 650% growth in new launches in the third quarter (July – September 2021), according to Knight Frank’s quarterly report.
Approximately 5,987 units were sold and 9,256 new units were launched in the third quarter. The average price increase increased by 2% compared to the quarter of 2020.
According to Knight Frank’s report, the COVID-19 pandemic has had a debilitating impact on most industries by causing aggregate demand to wane with excess capacity, debt traps and even bankruptcies.
However, its ultimate impact on the residential real estate market was quite paradoxical as it reignited the need for personal space and housing in the minds of buyers. The grave loss of security felt by the masses at the worst of the pandemic reinforced this feeling.
The pandemic has placed severe restrictions on human mobility and people have had to stay indoors for most of the past 18 months. This dramatically increased the perceived value of his house in all things.
The increased need for buyers to own a home, falling house prices, interest rates to a record low of less than 7% and stamp duty cuts in some of the key markets were the main drivers. of increased sales traction in 2021.
The report noted that falling residential prices, attractive interest rates and higher household savings rates over the past year are expected to support housing demand going forward. While financial stress remains an important factor for developers in all markets, homebuyers’ preference for Class A developers and their access to cheaper credit has positioned them well in this recovering market.
Overall average rental growth in all markets in the third quarter of 2021 was down 2%, but the city saw 363% growth in transactions from the 2020 quarter. The city reported 2.1 million feet squares of space in transactions in the third quarter.
However, office space completion was down 38 percent this quarter compared to last year. Only 2.2 million square feet of space has been completed.
Knight Frank noted that transaction volumes have been inversely correlated with the perceived intensity of the pandemic. Market activity peaked in the fourth quarter of 2020, as new cases of COVID-19 tended to decline and the near-term visibility of a viable vaccine increased.
Likewise, the second wave of infections impacted transaction volumes in the second quarter of 2021 and the current recovery reflects the comparative attenuation of the impact of the pandemic.
âAs it stands, almost 17% of the population is already fully vaccinated and our greatly increased understanding of the pandemic should help avoid a panic situation in the market as seen in 2020. Thus, it It is entirely plausible that the fourth quarter of 2021 could see increased traction like in 2020, provided infection levels remain low, âthe report said.