See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/348758512

Residential Flats Market in India: A Study on Hyderabad Market

Article · January 2021

CITATIONS READS

0 463

1 author:

Uppugunduri Srinivasa Rao

SSN ENGINEERING COLLEGE ONGOLE
7 PUBLICATIONS 55 CITATIONS

SEE PROFILE

All content following this page was uploaded by Uppugunduri Srinivasa Rao on 26 January 2021.

The user has requested enhancement of the downloaded file.

 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Residential Flats Market in India:

A Study on Hyderabad Market
Dr. U. Srinivasa Rao , Professor Marketing, School of Management Studies, SSN Engineering College, Ongole. A.P. In-
dia
Abstract
A country’s economic performance has direct repercussions on how its real estate market behaves. This is especially true
for the residential property segment. More prosperity resonates higher financial confidence among home buyers, and this
leads to a greater demand for homes. However, over the last two years, India has been battling various economic issues
such as rising fiscal deficit, a falling rupee and increasing food inflation which have adversely hit the performance of the
real estate sector of the country. Present study aimed to investigate the trends of residential flats market in India with fo-
cus on Hyderabad.

Keywords: Residential Flats; Real Estate; Supply; Demand; Infrastructure

Introduction
Growing population in India has put pressure on limited
infrastructure which may crash under the burden of the
weight of its population any time. Growing population
would put more pressure on existing housing sector. The
residential markets of the top six cities in India, namely
Mumbai, National Capital Region (NCR), Bengaluru,
Pune, Chennai and Hyderabad, have been witnessing
extreme volatility in terms of demand and supply over
the last two years. While the residential market showed
signs of recovery in 2012 and 2013, there was a sudden
drop in new launches and absorption from 2013 on-
wards. Factors like a slowing economic growth, rising
interest rates by banks, high inflation and the weak ru-
pee, among others, contributed towards building a nega-
tive sentiment among home buyers and resulting in a
dwindling sales volume. While new launches fell by
32% in 2014 compared to 2013, the sales volume
dropped by 27% during the same period. All the cities
witnessed a steep fall in absorption, in the range of 14-
37% during 2014. Hyderabad city has a driving demand
for residential flats market. In the recent years real estate
sector has shown growth with favorable factors such as:
Planned infrastructure growth and pushing capital val-
ues, launch of metro line with well connected networks,
establishments of IT parks and educational institutions.
The residential realty market which witnessed a pro-
longed slump since 2009 due to various factors like the
global recession as well as the political uncertainty sur-
rounding the bifurcation of the state is going through a
gradual phase of recovery at the moment. Since Hydera-
bad has a sizable population of migrants, particularly
IT/ITes professionals, the rental housing market is very
prominent in the city.
Objectives of the Study
Following are prime objectives of present study
1. To study the residential flats market in India
2. To study the supply and demand of residential flats at
Hyderabad market.
3. To study the area wise residential flats market at Hy-
derabad.
Scope of the Study
Hyderabad city’s real estate market, both residential and
commercial, is primarily driven by the IT sector. The
study is restricted to specific areas namely Chandanagar,
Gopanapally, Narsing, Moosapet, Whitefield, Tellapur,
Yapral and Tolichowki in Hyderabad city only. Hydera-
bad City has tremendous potential because, which is no
doubt an economically richest and cosmopolitan city,
people of various religions, languages, cultural back-
grounds and demographic and socio economic character-
istics live in this area.
Research Methodology
The research design which has been formed for this re-
search is descriptive research design. The nature of data
which is collected and used for this research article is
secondary. The relevant and required data are collected
from secondary sources such as text books, national as
well as international articles, news magazines and related
websites etc.
Need for the Study
This paper makes an attempt to study the residential flats
market in India with focus on Hyderabad. This infor-
mation can be utilized by marketers in their favor to win
the hearts of the consumers and minimize the gap be-
tween supply and demand of residential flats in the mar-
ket.
Residential Flats Market in India
The total new housing demand will be nearly 12 million
units (Cushman & Wakefield (C&W) in the next five
years (2013- 17). This is based on the estimated growth

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 558
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

of population across India and in major 8 cities like New
Delhi, Mumbai, Kolkata, Ahmedabad, Pune, Bengaluru,
Chennai and Hyderabad. Middle Income Group (MIG)
and Higher Income Group (HIG) categories constitute
majority of the demand at 2.5 million units. Demand for
Lower Income Group (LIG) will be relegated to a mere
300,000 units in these 8 cities, due to increase in housing
and income standards that are expected to be witnessed
in these key economic centers of India.

Figure No: 1

The gap between cumulative supply and demand (in
MIG and HIG categories), in the period of 2013 – 2017,
is estimated to be approximately 45% in the top eight
cities where demand is higher than supply. Most cities
are facing a short fall of supply especially in the mid end
segments, leading the gap in demand and supply, as de-
velopers are less keen on smaller ticket prices on account
of high land costs, surmounting construction costs and
reduced profitability. Further, financing large scale pro-
jects are also becoming a challenge for developers as
financial institutions are wary of lending to the real es-
tate sector going by the directive from RBI and Securi-
ties and Exchange Board of India (SEBI) (See Figure
No:1)
After more than three years of spectacular house price
rises, India’s property market continues its downward
trend, mainly due to high interest rates on home loans
and slower economic growth. Residential property prices
are now falling in most cities in real terms (given India’s
high inflation, it is important to distinguish nominal
price rises from real price rises). Nominal house prices
rose in 13 cities (out of the 26 cities covered by National
Housing Bank (NHB) Residex figures) during the year to
Q1 2014, while the remaining 13 cities have seen their
nominal house prices fall. But when adjusted for infla-
tion, house prices actually fell in 21 cities, whereas only
5 cities experienced price increases. (See figure no: 2&3)
Indian buyers usually pay for apartments before con-
struction has been completed. Many buyers do not take
out mortgage loans. As a result, the ratio of housing
loans to GDP is very low. In 2012, housing loans in In-
dia were only around 4.14% of GDP. The leading mort-
gage lender is the Housing Development Finance Corpo-
ration (HDFC) followed by the State Bank of India
(SBI).

Figure No: 2: % of House Prices Change Over a Year Earlier

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 559
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Total housing loans in India were around INR 4,033.78 Interest rates at major banks and financial institutions
billion (US$ 63.36 billion) in 2012, up by 12.3% from range from 9.95% to around 11.10%, while fixed-rate
INR 3,590.67 billion (US$ 56.40 billion) a year earlier. mortgages

Figure No: 3

are at 11.50% to around 13%. The loan to value (LTV)
ratio of most Indian homes should not exceed 80%, ac-
cording the RBI. However, according to RBI’s Master
Circular dated July 1, 2013, as of June 21, the following
LTV ratios are now maintained by banks. (See figure no:
2 &3)
Hyderabad Residential Flats Market
Demand and Supply Analysis: Residential flats up to
Rs.20 lakh and Rs.20-40 lakh budget ranges witnessed
healthy demand in the city. When compared to the pre-
vious quarter (Oct-Dec 2014), the former category saw
consistent demand while the latter category saw a jump
in demand by 2%. Demand in the Jan-Mar 2015 quarter
stood at 37%. Availability of properties in the less than
Rs.20 lakh budget dropped by 3% while in the Rs.20-40
lakh budget it remained consistent at 25%. The up to
Rs.20 lakh budget witnessed an oversupply whereas the
Rs.20-40 lakh budget remained under supplied by 12%.
(See Figure No:4 &5)

Figure No 4: Demand & Supply of Residential Flats at Hyderabad Market

40 3735 30 27
30
33 Oct - Dec… 24 25
25
Oct - Dec
30 18
17 16 17
17 2014
20
1818 14
20 Jan-Mar
11 9 10 2015
10 45
0 0
60-…
100…
<20
20-40
40-60

<20 20-40 40-60 60-100 100 &

above

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 560
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Figure No 5: Budget Wise Demand and Supply of Residential Flats at Hyderabad

<20 LAKH DEMAND 20-40 LAKH DEMAND

Oct-Dec Oct-Dec
4% 2014 35% 2014
37%
5% Jan-Mar Jan-Mar
2015 2015

<20 LAKH SUPPLY 20-40 LAKH SUPPLY

Oct-Dec
2014 Oct-Dec 2014
24% 25% 25%
27% Jan-Mar Jan-Mar 2015
2015

Residential Flats Market at Hyderabad (Se-
lected Areas)
The improving realty market of Hyderabad contributed
14% to the total unit launches across top eight cities dur-
ing the first quarter of 2015. In the next five years (2013
– 17), Hyderabad is expected to see an additional de-
mand of close to 262,000 residential units in the mid and
high-end categories. Of this total demand, mid-ranged is
expected to be approximately 65%. Steady growth in the
services sector, mostly driven by IT/ITeS has contributed
to the influx of people to the city. Hyderabad saw a surge
in high-end segment launches of about 3,300 units out of
which about 98% were in the north west of the city ac-
cording to research by Cushman & Wakefield. The initi-
atives being taken by the government for attracting IT
employees is the main driving force for launches in this
region. Q1 2015 (Jan-Mar) saw the lowest number of
project launches over a period of two years in the coun-
try according to the research. However, Hyderabad con-
tributed 14% to the total unit launches across top eight
cities during the quarter. The average number of units
per project was highest i.e 669 in Hyderabad as com-
pared to Mumbai, Delhi NCR, Kolkata, Chennai,
Benguluru, Ahmedabad and Pune. Budget & BHK wise
analysis of residential flats in important areas at Hydera-
bad are as follows.
CHANDANAGAR
Chandanagar is a suburb that has grown exponentially in
the last decade and a half. Most of the development in
the area is largely owned to its proximity to Hyderabad’s
IT hub. Budget & BHK wise supplies of residential flats
at this area are as follows.

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 561
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Figure No 6: Budget & BHK wise supplies of residential flats at Chandanagar

BHK Wise supply

Up to 20 lakh
50%
60%
16% 19% 50% 38%
Rs 20-40 lakh
40%
14% 30%
Rs 40-60 lakh 20%
29% 12%
22% 10%
Rs 60-100 0%
lakh 2-BHK 3-BHK 4-BHK &
above

Discussion: Properties worth Rs 20-40 lakh recorded
maximum availability at 29% About 22 and 19% availa-
bility was also seen for properties worth Rs 40-60 lakh
and up to Rs 20 lakh. The Locality witnessed 50% avail-
ability of 2-BHK units followed by 3-BHK category at
38% 4-BHK category stood at 12% (See Figure No: 6)
GOPANAPALLY
Gopanapally is an area where lot of plotted development
is being undertaken currently. The main advantage of the
area is its proximity to the city’s financial district locat-
ed. This area caters to the segment of people who wish to
have a home in peaceful environment that is away from
much hustle-bustle. Budget & BHK wise supplies of
residential flats at this area are as follows.

Figure No 7: Budget & BHK wise supplies of residential flats at Gopanapally

Up to 20 lakh BHK wise supply

3%11% 60%
32% Rs 20-40 lakh
40%
Rs 40-60 lakh 20% 48% 42%
9% 45%
0% 10%
Rs 60-100
lakh 2-BHK 3-BHK 4-BHK &
above

Discussion: Maximum availability of properties was NARSINGI

within Rs 40-60 lakh category at 45%, followed by
properties within Rs1 crore and above at 32% About
11% was noted for Rs 20-40 lakh budget range. The lo-
cality witnessed a maximum 44% availability of 3-BHK
units followed by the 2-BHK category with 31% availa-
bility. The 4-BHK category saw 23% availability. (See
Figure No: 7)
Nursing is a village and a panchayat in Ranga Reddy
district of Telangana State. Developers are involved in
the construction of high-end projects. With IT companies
at the convenient distance, it targets the top management
of the IT companies. Budget & BHK wise supplies of
residential flats at this area are as follows.

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 562
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Figure No8: Budget & BHK wise supplies of residential flats at Narsing

Up to 20 lakh BHK Wise supply

5% 50% 42%
19% Rs 20-40 lakh 40%
34%
30%
50% 20% 24%
Rs 40-60 lakh
17% 10%
0%
9% Rs 60-100 lakh
2-BHK 3-BHK 4-BHK &
above

Discussion: The availability of properties in the budget MOOSAPET

of Rs.1 crore and above was at 50% About 19 and 17%
availability was also registered of properties in the range
of Rs 20-40 lakh and Rs 40-60 lakh range. The locality
witnessed maximum availability of 4-BHK units fol-
lowed by 3-BHK units. Both categories recorded 42 and
34% availability. (See Figure No: 8)
Located at North-West Hyderabad and nearer to Hitec
City. In terms of property prices, the area is compara-
tively affordable hence is a preferred choice for those
who cannot afford to buy nearer to Hitec City. Budget &
BHK wise supplies of residential flats at this area are as
follows.

Figure No9: Budget & BHK wise supplies of residential flats at Moosapet

BHK Wise supply

10% 56%
Rs 20-40 lakh 60%
35% 39%
Rs 40-60 lakh 40%
36% Rs 60-100 lakh 20%

Over Rs 1 crore 0% 5%
19%
2-BHK 3-BHK 4-BHK &
above

Discussion: Properties worth Rs 40-60 lakh and within WHITEFIELD

Rs.1 crore and above were available at 36 and 35% re-
spectively. Residential units worth Rs. 60 lakhs. Rs.1
crore and Rs 20-40 lakh was available at 19 and 10%.
The locality witnessed maximum availability of 3-BHK
units at 56% and 2-BHK units at 39% Only 4 per cent
availability was seen for 4-BHK and above category.
(See Figure No: 9)
Located within 5KM of distance from IT hubs such as
Hitec city. The area is preferred by IT people working in
the IT/ITES, BPOs and software companies. The area is
a peaceful and clean residential area with necessary pro-
visions for children and family. Budget & BHK wise
supplies of residential flats at this area are as follows.

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 563
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Figure No: 10 Budget & BHK wise supplies of residential flats at Whitefield

up to 20 lakh
BHK wise supply
2% 80%
23% 17% RS 40-60 60%
40%
lakh 20%
RS 60-100 0%
Series 1
lakh
58%
over 1 crore

Discussion: The budget range of Rs. 60 lakh- Rs. 1 crore TELLAPUR

offers properties at 58% followed closely by Rs. 1 crore
and above budget at about 23% Availability of properties
within Rs. 40-60 lakh was noted at 17%. The locality
witness maximum availability of 3-BHK units at 71%
fallowed by 2-BHK category with 17% the 4-BHK cate-
gory saw availability 12% (See Figure No: 10)
Tellapur is fast gaining importance in hyderabad’s real
estate as several gated communities are underway in the
area. Located in medak district, its proximity to the IT
hub and business districts makes the area a good option.
Budget & BHK wise supplies of residential flats at this
area are as follows.

Figure No11: Budget & BHK wise supplies of residential flats at Tellapur

up to 20 BHK wise supply

2%7% lakh
80%
17% RS 20-40 60%
lakh 40%
4% 20%
RS 40-60 BHK wise
70% 0% supply
lakh
RS 60-100
lakh

Discussion: Maximum availability of properties at 70% YAPRAL

was noted within Rs.1 crore and above category. About
17% availability was recorded for properties in the Rs.
40-60 lakh range.The locality witness maximum avail-
ability of 4-BHK units at 67% fallowed by 3-BHK cate-
gory with 24%. The 2-BHK category saw 9% availabil-
ity only. (See Figure No: 11)
Yapral is a cosmopolitan locality; it is popular amongst
non-locals and retired military personnel. It is about
11KM away from Secunderabad railway station and has
easy access to Hyderabad. Budget & BHK wise supplies
of residential flats at this area are as follows.

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 564
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

Figure No 12: Budget & BHK wise supplies of residential flats at Yapral

Sales BHK wise supply

60%
Up to 20 lakh
11%2%11%
40%
16% RS 20-40 BHK wise
lakh 20% supply
60% RS 40-60 0%
lakh
2 BHK34BHK
BHK & above

Discussion: Properties worth Rs. 60 lakh to Rs.1 crore TOLICHOWKI

recorded maximum availability at 60%. About 11% was
noted for both categories. Rs.1 crore and above and Rs.
20-40 lakh. The locality witnessed 48% availability for
3-BHK units fallowed by 42% for 4-BHK category. The
2-BHK category stood at 10% (See Figure No: 12)
Tolichowki is one of the developed localities of the city.
A premium suburb, it is located on the western part of
Hyderabad. The locality is at 9-11 KM distance from IT
corridors. Budget & BHK wise supplies of residential
flats at this area are as follows.

Figure No13: Budget & BHK wise supplies of residential flats at Tolichowki

up to 20 lakh BHK wise supply

2%
5% 40%
RS 20-40 30%
24% lakh 20%
53% 10%
RS 40-60 BHK wise
lakh 0% supply
16%
RS 60-100
lakh

Discussion: Maximum properties available were within
the Rs. 1 crore and above category at 53% Properties
within the Rs.40-60 lakh and Rs 60 lakh. Rs.1crore were
available at 24% and 16% respectively. The locality wit-
nessed 37% availability of 3-BHK units. Equal availabil-
ity of 37% was also noted for 4-BHK units. About 26%
availability was noted for 2-BHK units. (See Figure No:
13)
Conclusion
Over the years, Indian real estate has been a seemingly
limitless source of negative hype. Scams, controversies,
rumblings about delayed projects, agitations by consum-
ers and debates about the over under-regulation of the
real estate sector, have all provided ready cannon fodder
for countless publications, internet forums and assorted
activists. Most large listed real estate developers in India
today, have wholeheartedly embraced the manthra of
complete transparency. They are also fighting hard to
correct the structural deficiencies of the overall regula-
tory system, not only because their businesses are suffer-
ing but because they are being held accountable for fac-
tors which are beyond their control. They take their roles
as industry stake holders very seriously, and are among
the loudest voices in the outcry for positive change at a
policy and regulatory level.
References
[1] Global Market Perspective-Q1 2015, Jones Lang
LaSalle, p.no 6-7, 29
[2] India Real Estate Overview, CRISIL Research, p.no
4-5
[3] Bridging the Urban Housing Shortage in India,
KPMG, p.no 5-7

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 565
 Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 4, No.9,September 2015

[4] CRISIL Customised Research Bulletin Feb 2014 – [11] CREDAI website www.credai.org
Sector Focus: Real Estate, p.no 8, 12 [12] Economic Times website www.economictimes.com
[5] Economic Survey 2012-13, CSO, p.no 2 [13] Business Standard website www.business-
[6] Union Budget 2013-14: Impact Analysis, Dun & standard.com
Bradstreet, p.no 19-20 [14] Times of India website
[7] Pune Residential Real Estate Overview,Dec 2012, www.timesofindia.indiatimes.com
ICICI Property Services,p.no5-6,10-18 [15] CNBC TV
[8] IGBC Green Homes Rating System, Indian Green [16] Money control website www.moneycontrol.com
Building Council, Apr2012,p.no. 14, 16 [17] www.magicbrics.com
[9] Green Rating for Integrated Habitat Assessment, [18] www.joneslanglasalle.co.in/india/en-gb/research
GRIHA Rating, p.no. 4 [19] content.knightfrank.com/research
[10] Maharashtra Special Town Ship Policy 2006, Maha- [20] www.colliers.com
rashtra Government, p.no. 5-12 [21] www.leadsinfra.net.in

© The Author © Blue Ocean Research Journals

www.borjournals.com Open Access Journals Blue Ocean Research Journals 566

View publication stats