Hyderabad’s real estate market is currently navigating contrasting trends, with luxury housing experiencing a slowdown despite record-breaking supply volumes and steady demand in the commercial office segment. According to the latest report by Nklusive, a leading consultancy specializing in premium and luxury real estate, a combination of regulatory challenges, supply-demand imbalances, and market uncertainties have tempered overall sentiment. Yet, the fundamentals of Hyderabad’s property sector remain resilient, supported by infrastructure projects, foreign investment inflows, and emerging micro-markets that promise a dynamic growth trajectory.
Market Overview: Supply Growth Meets Demand Challenges
Hyderabad set a new benchmark in real estate development in 2024 with a massive 13.9 million sq ft of new commercial office space delivered—an unprecedented supply volume in the city’s history. Gross leasing volume (GLV) reached 7.6 million sq ft, accounting for approximately 14% of India’s total office leasing activity. Despite this, the luxury residential market saw a dip, with 23,679 new high-end residential units launched in 2024 compared to 37,130 units in 2023.
Key Drivers
- Strong Pre-commitment: Around 30% of the year’s new office supply was pre-committed, indicating steady occupier confidence.
- Rental Stability: Prime commercial hubs such as Hitec City and Gachibowli experienced slight rental rate increases.
- Grade A Preference: Demand continues to favor ESG-compliant, tech-integrated, premium office spaces.
Emerging Trends Shaping Hyderabad’s Real Estate
- Flight to Quality: Increased focus on premium, ESG-certified buildings reflecting corporate sustainability goals.
- Hybrid Work Model: Rising adoption of flexible workspaces as companies adapt to hybrid working arrangements.
- New Micro-Markets: Expansion beyond traditional hubs with Kondapur, Raidurg Extension, and Kokapet gaining traction.
Expert Insight
Pawan Kumar Agarwal, Managing Director of Nklusive, stated:
“The Hyderabad luxury housing market has experienced a marked deceleration over the past year, driven by a complex interplay of factors. However, despite this temporary slowdown, the underlying demand for premium and luxury residences remains robust. The fundamentals of Hyderabad’s real estate remain strong, and we foresee a market that is more stable, transparent, and opportunity-rich in the near future.”
Quick Facts Table
| Metric | CY24 Data | CY23 Data |
|---|---|---|
| Commercial Office Supply | 13.9 million sq ft | N/A |
| Gross Leasing Volume (GLV) | 7.6 million sq ft | N/A |
| Contribution to India’s Office Leasing | ~14% | N/A |
| New High-end Residential Units | 23,679 units | 37,130 units |
| Key Micro-Markets | Kondapur, Raidurg Extension, Kokapet | Traditional hubs like Hitec City, Gachibowli |
FAQ
1. What caused the slowdown in Hyderabad’s luxury housing market?
The slowdown is attributed to regulatory hurdles, administrative delays, supply-demand mismatch, and uncertainties around HYDRAA and FAR limitations.
2. How did Hyderabad perform in the commercial office segment?
Hyderabad achieved record supply of 13.9 million sq ft with a GLV of 7.6 million sq ft, representing about 14% of India’s overall office leasing.
3. Which areas are emerging as new micro-markets in Hyderabad?
Kondapur, Raidurg Extension, and Kokapet are gaining prominence as attractive alternatives to traditional commercial and residential hubs.
4. What trends are influencing office space demand?
There is a shift towards premium, ESG-compliant buildings and flexible workspaces aligned with hybrid work models.
5. What is the outlook for Hyderabad’s real estate market?
Despite short-term slowdowns, the market is expected to stabilize and grow, supported by infrastructure projects, improved regulations, and sustained demand for quality spaces.