Hyderabad: The stability and success of the real estate sector are usually gauged by the fact of how much of the demand and/or sale is for self-use and not if a property is being bought for investment purposes.
In such a scenario, the price range of Rs 25 lakh to Rs 50 lakh segment plays a pivotal role in determining the continuity of the real estate market of a particular city.
In Hyderabad, where the prices are comparatively lower than in other metro cities, more than half of the residential sales happened in the price range of Rs 25 lakh to Rs 50 lakh. And this percentage has seen a jump of almost 20 per cent in the last year, according to a report by Knight Frank Research which based its data on Telangana Registration and Stamps Department.
Real estate analysts and industry insiders believe that this increase is not only due to the growth of the sector in the State but also due to an increase in disposable incomes and also the need for homes among genuine buyers.
“There has been a substantial increase in prices over the years and at the same time incomes have also gone up. This has led to an increase in buyers who can afford homes. This price range of Rs 25 lakh to Rs 50 lakh is an affordable segment and the majority of the sales are happening in the higher end of the price range.
There are even properties in some areas where a 2BHK is being sold for even Rs 75 to Rs 80 lakh. Going ahead, I anticipate the majority of the sales happening in the Rs 50 lakh to Rs 80 lakh segment,” says G Ram Reddy, national vice-president, Credai.
JLL India Hyderabad MD Sandip Patnaik believes that the reason for a jump in sales for the above-mentioned price range is because of salary hikes and a ‘talent war’. “It is the first time in the last twenty years that the IT sector is seeing a never seen before salary hikes. Companies are racing to retain talent by offering huge hikes in a ‘talent war’ scenario. This has led to a salary hike of almost 50 per cent to 300 per cent. In the last year, the disposable incomes of buyers have gone up and they are investing that amount in real estate,” Patnaik says.
The report also mentions that the highest sale in terms of unit size was for 1,000 to 2,000 sq ft units along with 2,000 to 3,000 sq ft witnessing a marginal rise. Out of the total sales, about 72 per cent happened for 1,000 to 2,000 sq ft units.
“Until January of this year, there was ‘fear of missing out’ (FOMO) effect among real estate buyers. But now, there has been growth among genuine buyers who are buying residential properties for self-consumption. While last year was all about announcements of new projects, this year is all about the launching of those projects. All this has provided more options to buyers and when property sales happen for self-use then it indicates stability for the market,” says Samson Arthur, branch director, Hyderabad, Knight Frank.