The Hyderabad real estate market is poised for substantial growth following the recent general election outcomes. A report from ANAROCK Research indicates that the city’s commercial real estate sector is expected to benefit greatly from the political stability and pro-business policies anticipated from the newly elected government.
The Maharashtra Industrial Development Corporation (MIDC) highlighted that the emphasis on infrastructure development and business-friendly policies is likely to attract more IT firms and other industries to Hyderabad, increasing the demand for commercial real estate. Fresh development initiatives and improved connectivity are expected to draw significant investment to remote locations, further bolstering the market. Between 2021 and the first quarter of 2024, Hyderabad’s residential market saw robust growth, with approximately 218,800 new residential units launched and 154,300 units sold. The year 2023 was particularly notable, with nearly 76,300 units launched and 61,700 units sold, representing increases of 48% and 143% respectively compared to 2021 figures.
However, the political mandate in neighbouring Andhra Pradesh, coupled with its large majority and central government ally, may moderate Hyderabad’s real estate growth. Land prices in Hyderabad have appreciated by over 30% in the last three years, influencing price rises across all asset classes in the city. Consequently, residential real estate launches in Hyderabad might rationalise as investors and buyers seek competitive opportunities in Andhra Pradesh, which is expected to witness significant development along new growth corridors.
Despite this, Andhra Pradesh’s potential development can serve as a double-edged sword for Hyderabad’s real estate. The overall impact is likely to be positive, as growth in Andhra Pradesh could spark a ripple effect, attracting businesses and investors to the entire region. This may lead to increased demand for office and commercial space in Hyderabad, particularly along key corridors like the Hyderabad-Vijayawada highway, which is already being primed for development with infrastructure projects and industrial parks.
Challenges remain, such as the potential out-migration of businesses or residents to Andhra Pradesh if it offers lucrative incentives. This could draw some investments away from Hyderabad, leading to a temporary correction in real estate prices and a possible dip in the commercial real estate market. However, Hyderabad’s established infrastructure, large talent pool, and cosmopolitan character are likely to retain businesses in the short term.
Hyderabad remains the nearest mega cosmopolitan centre for both Telangana and Andhra Pradesh, making it an attractive destination for people from neighbouring cities and towns. It is preferred for higher education, employment, entertainment, advanced healthcare, and shopping, which contributes to a significant influx of housing buyers from Andhra Pradesh.
