I have been observing real estate markets in Hyderabad for a small amount of time and have made some observations on how things are working, and this blog is to share some details. The topic is very broad would be hard to cover in one post, if people are interested I can detail on any specific section. Before you continue reading, I would like to call out I am no expert in the subject and it’s my curiosity to understand things that made me analyse the markets. So, if you find something to be corrected, please comment and I will be happy to learn.
Hyderabad has seen a tremendous growth since the early 2000’s when the HITEC city started. You can clearly see the difference below.
Though I couldn’t observe the initial growth phase, I have been in Hyderabad since 2010 and given my relatives are spread across the city, I had an opportunity to travel the city and witness the transformation of the city. The Hitec City, Metro rail, Financial District, ORR projects have changed the face of the city. Telangana is formed as a new state in 2014 and had a progressive government which focused on developing the infrastructure, encouraged IT/Pharma and greatly improved the IT exports from the state that closely competed with Bengaluru.
When such a drastic change happens of course the businesses start flourishing and with infra development the Real Estate market saw a boom as never seen before. Particularly when the first government of Telangana came to power the second time, there was an immediate spike of 30% in the market value, covid couldn’t stop growth and what happened after covid lull was even more crazy.
Now to talk about the main points – the real state sector has seen huge inflow from end users, investors, larger RE players (Prestige, DLF, Brigade, Lodha etc) from India and abroad given Hyderabad was an affordable market. In the process there have been multiple options of investment to get really good returns. There have been multiple win:win models which the developers and investors have come up in this time. For example: One Time Payment (OTP) has been in the picture where the investors get to invest in the project at a very early state during the land acquisition and get a flat for almost 50% discount compared to launch price. Or you directly buy from the landlord share for a very reasonable price since the landlords usually rotate in search of new opportunity.
Similarly, a lot of people have taken bet on agricultural land, farmlands, open plots and the investment continued to flow from across the globe and price kept moving higher and higher.
In the process some small percentages of folks have also lost money due to frauds from some companies which tried to take advantage of the market. A great number of people made money, a small portion lost money (similar to the stock market investment or trading).
Overall, in the last 10 years I see developers have become smart, investors have become smart, end users have become smart. Hyderabad now caters to every segment of the market – Luxury Villas which cost upwards of Rs. 30-40+ Cr, large size flats upwards of Rs.20+ Cr, small flats with value of Rs. 30 Lakhs – almost every segment can be catered here.
All this I believe this spike in the market can be linked to exponential growth in IT sector – which improved business, real estate, entertainment, hospitality etc. Hyderabad now has the most number of high-rise apartments next to just Mumbai, has the most number of luxurious cars among the top 5 in the country, almost all luxurious fashion brands are here or plan to setup here. Hyderabad is a world class city or is on the path to be one.
There is a still huge potential but exercise with caution, don’t just go by hype, analyse the area, focus on organic growth, take time, reach out to experts and then invest and you would definitely make good returns. Do due diligence by checking the details from various government sites like I outlined here. Choose to invest with people who have been in the markets for long and provide a genuine analysis of the landscape. Also don’t blindly follow every investment option out there due to FOMO. Don’t just go by looking at Google maps, visit the location in person or a trusted source to understand the locality and invest. You should have a reason on why you are buying a property – end use, investment, long terms, short term, price point to exit etc etc. The markets are good, and you will definitely get good opportunities all the time. Just keep watching and be ready.
I see this trend to continue too. Many successful start-up founders, successful start-ups exit, startup investors also continue to invest their money in RE – one due to fact owning a real estate is real, second there is a tax advantage. I have couple of startup friends who did the same and recently a video validated my assumption – I looked at a startup investor who claims he never invested in real estate, but he would buy a big property when his start-up investment gives him a great return. That imply all investment at the end comes to real estate 🙂 (take it a pinch of salt). You see some of the large land bank owners in US too are top tech execs (at least that’s what I read in media!).
And by the way, the real estate stocks have been doing fantastic in the last couple of years, if you have invested in those instead of buying a flat the returns would have been even amazing :haha. This is a fun discussion to have too!!
No, I am not a real estate expert, I am a silent spectator. This is the only area outside of computer science which has grabbed my attention 🙂 There is a very personal reason why I became curious about this domain and will continue to learn about it.
Ranganathg's Blog 
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