Covid-19 pandemic and measures to contain it has caused a worldwide halt to economic growth. The repercussion of this pandemic and lockdowns has even hit India and its major metros like Hyderabad. The lockdown was an economic shock to the city and its growing real estate sector. Project works went standstill for over 45 days of the lockdown before resuming in the first week of May.
Here are some key trends in Hyderabad real estate during Covid-19 crisis:
Market trend across segments
Market trend in terms of New Projects will see a decline until end of next financial year.
Residential real estate
Residential real estate sales will see a decline, but not to the extent of other metros, say Mumbai or Delhi.
Affordable housing and mid-tier (Rs 50–75 lacs) projects sales will see a decline, since most of this section of buyers will be hit hard (Job loss, pay cuts) by economic slump in the state and the country. Currently, there are around 20,000 apartment units under this category in the city.
Under construction Premium/Luxury housing may see sales decline since projects are expected to be delayed due to labour shortage. Ready to move Premium/Luxury housing (around 7000 units) will see more or less stable sales growth.
There is a lot of inventory which is under construction. Most of the inventory in this category is luxury apartments (13000+ units).
Open plots along ORR and inner city may see slight decline in sales. But those ventures that are 10+km from ORR will see rapid decline in sales unless developers sell them at discounted prices bearing losses in order to exit.
Agriculture & industrial land sales may see some upside as investors would try to take advantage of the falling prices.
Commercial real estate
Buyers will be cautious in investing on commercial real estate. Commercial real estate will be hit the hardest with many small businesses closing or large business chains reducing their number of outlets.
Majority of the migrant labourers who migrate to Telangana work in construction engaged in various real estate projects and construction activities.
The mass migration of migrant labourers to their respective native places by special trains arranged by the Telangana government has put a damper over the real estate sector in the state, in particular over Rs 45,000 crore worth of projects in and around the Hyderabad.
Builders are worried that shortage of labour in the city could delay project completions and increase costs.
Traditional investors shift to Physical assets
More and more investors are turning to buying real estate instead of investing in the stock markets. Certainly, physical assets offer the highest sense of protection, particularly during challenges such as Covid-19, or when stock markets are plummeting to new lows and financial markets are in turmoil.
According to experts and consultants, real estate sector will become bullish and positive post Covid-19 and Hyderabad will remain the most favourite investment destination.
During a webinar conducted by the Federation of Telangana Chambers of Commerce and Industry (FTCCI) panelists believed that this phase was only a pause for growth and investment traffic is neither lost nor diverted, thanks to the initiatives of the Telangana State Government in the fight against Covid 19.