Recent data shows that key micro markets in Hyderabad have witnessed a remarkable 20 percent rental growth in 2023 compared to 2019. This surge in rental prices has placed significant strain on tenants seeking affordable housing options. Aakanksha Tripathi, a newcomer to Hyderabad for work, has encountered difficulties due to frequent rent hikes and landlords pressuring tenants to vacate in order to increase rents for new occupants.
Over the past year, Hyderabad's real estate market has experienced a boom, with rental prices surging by 20-30 percent and property values appreciating by 10-15 percent, as reported by local real estate experts. Many renters have been compelled to explore alternative housing solutions like co-living spaces to cope with substantial rent increases. Analysts point out that Hyderabad's real estate market has consistently outperformed hot markets like Bengaluru since 2019.
The robust demand for real estate in Hyderabad is chiefly driven by the IT sector concentrated in areas such as HITECH City, Kundapur, and Gachibowli. The southern region, closer to the airport, has also witnessed significant development. The eastern part of the city, including Secunderabad and Ramoji Film City, predominantly consists of office spaces and affordable residential real estate. Meanwhile, in the north, a thriving data center and warehousing business has emerged, thanks to available land banks.
In prime areas along the western IT corridor, the average rent for a 2BHK apartment ranges from Rs 20,000 to Rs 25,000 for unfurnished units and Rs 30,000 to Rs 35,000 for furnished ones. Apartment capital prices average around Rs 10,000 per sq ft, rising to Rs 15,000 for premium apartments. The city's real estate sector's growth is evident, with rental prices increasing by 20 percent across various micro markets, including HITECH City and Gachibowli. Experts draw parallels between Hyderabad's real estate market and that of Bengaluru, noting that Hyderabad has been at a premium since 2019. Although both markets have seen post-pandemic growth, Bengaluru's dispersed IT industry has alleviated rental pressures, unlike Hyderabad, where IT hubs are concentrated in a single zone, leading to high rental demand. Nevertheless, Hyderabad is rapidly catching up, with annual real estate growth nearly matching Bengaluru's.
In summary, the Hyderabad real estate market has experienced substantial rental growth in recent years, surpassing other major markets. Despite the hurdles posed by escalating rental costs, industry experts maintain a positive outlook regarding the market's prospective expansion.
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