Real estate Hyderabad forecast for 2018 What were the challenges faced by the Real Estate sector in Hyderabad in 2017? 2017 had been one of the toughest periods for residential real estate developers. The real estate companies were confronted with different challenges ranging from remodeling their businesses to conforming to the GST rollout to altering their business patterns in the face of RERA. Demonetization compounded the problems of investors forcing them to stay away from the market. Real estate investment trusts (REITs) did not see the light last year as anticipated. Further, real estate developers stopped sales in construction projects not registered under RERA in major cities. A combination of all these factors resulted in a quarterly sales dip in five out of the major seven cities to the bottom level of 4.8 per cent in the third quarter of 2018.
How the real estate companies overcame challenges?
Amid a bleak scenario, affordable housing Projects in Hyderabad emerged out of the shadows and reasonably-priced housing units were sold out like hot cakes in a large number of cities. Would there be capital value appreciation in Hyderabad in 2018? In 2017, capital price in cities such as Hyderabad witnessed a marginal rise due to their reduced price when compared to the Tier 1 cities. The trends are going to be more or less remaining the same and the housing value property is tipped to stay firm in 2018 too. Hyderabad to witness higher demand for Office rentals in 2018 In the office space section, vacancy levels stay unaltered through 2017, wavering at nearly 14 percent across India. Specific markets experienced lower vacancy levels and are tipped to come down further in 2018. On the whole, vacancy levels will probably stay around 15 percent next year. Significantly low vacancy rates and persistent demand in the well-known office corridors of Hyderabad and other cities will enable better rental value in 2018. In 2018-19, Hyderabad will emerge as one of the cities in India that will reach a peak in office space. JLL (India), a global real estate investment firm, reckons that rents in office space market are going to cross its significant rises of 2017 next year. Across India, combined office stock in seven major cities including Hyderabad is expected to reach nearly 600 million square feet before the end of 2019. Last year, in co-working spaces, approximately 1.2 million square feet got used across top Indian cities, including Hyderabad. New retail area of 6.4 million sq. feet was done in 2017 making this year the second-best after 2011 with regard to net absorption. Shopping mall stock is expected to go up strongly in the coming 3-4 years in top seven Indian cities, as nearly 20 million sq. ft. of supply is tipped to be ready before the end of 2019.
Out of this 20 million, nearly 11 million sq. ft. of supply is anticipated in 2018 if completion delays are not made responsible. Hyderabad’s retail stock, in terms of percentage share, is anticipated to go up in the coming few years. What contributed to the downfall of Real Estate in Hyderabad in 2017? 2017 year had been one of the toughest years for residential real estate developers, who were confronted with lots of challenges ranging from compliance with the GST rollout to readjusting their business to altering business models in the face of RERA. Coupled with this, demonetization prompted investors to stay away from the market. GST applicable to buying homes in projects that are underway resulted in home buyers to either acquire the constructed home or stick to their purchase decisions. Together with this, real estate developers stopped sales in projects that were not registered under RERA across top cities. A combination of all these factors resulted in the dip of quarterly sales in five out of the top seven cities to the bottom of 4.8 percent in the third quarter of 2017. How would the Retail Space shape up in 2018? In 2018, Hyderabad will reach the level of being the city with elevated absorption of office space. The future supply in Hyderabad is tipped to be healthy. The residential asset category bagged a huge share of investments in the country this year. Initiation of major reforms will make Indian residential realty more transparent. Stable investments will continue to pour in this asset class in 2018.