The Impact of India's Recent Union Budget on Hyderabad's Real Estate Market
Viridā Nature Estates
The Impact of India's Recent Union Budget (2024) on Hyderabad's Real Estate Market.
Published: 24 July 2024 by Viridā Nature Estates
Insights / Real Estate / 01
# IndiaBudget # RealEstate # Hyderabad
The recent Union Budget of India is poised to significantly impact Hyderabad's real estate market, particularly in the western corridor regions. With substantial investments in infrastructure, corporate growth, and employment generation, these areas are set to experience increased demand for residential, commercial, and land properties. Shankarpalle, with its proximity to IT and business hubs, promises high returns, while Mominpet offers more affordable investment opportunities with considerable growth potential. Overall, the budget's focus on development makes investing in Hyderabad's real estate a stable and lucrative option for enhancing one's investment portfolio.
India's Union Budget 2024
India's recent Union Budget has brought a fresh wave of optimism to the real estate sector, particularly in burgeoning metropolitan areas like Hyderabad. Known for its vibrant IT sector and burgeoning infrastructure, Hyderabad's real estate market stands poised to benefit significantly from the budget's provisions. This study delves into how the Union Budget will impact Hyderabad's property market, with a focus on land, plot, and apartment investments, and why these investments promise stability and growth.
Hyderabad's Emerging Western Corridor
The western corridor of Hyderabad, encompassing areas like Shankarpalle and Mominpet, stands out due to its strategic location and rapid development. Here’s why these regions are gaining traction:
Strategic Location: Proximity to Hyderabad's major IT hubs, such as Hitech City and the Financial District, makes Shankarpalle and Mominpet attractive for both residential and commercial investments.
Infrastructure Development: Ongoing and planned infrastructure projects, including improved road connectivity and public transport, are set to boost property values in these areas.
Investment Influx: The establishment of new factories, offices, and tech parks in the region is expected to generate employment, further driving demand for housing.
Quality of Life: With a balance of urban amenities and serene environments, these areas are becoming preferred residential locations, particularly for IT professionals.
This budget prioritises sustainable urban development, housing for all, and robust infrastructure, which are crucial for the growth of our real estate sector. By facilitating investment and ensuring transparent land transactions, we aim to create a more vibrant and inclusive property market.
Nirmala Sitharaman, Finance Minister
Key Budget Announcements
The budget announced the construction of three crore additional houses under the Pradhan Mantri Awas Yojana (PMAY) in rural and urban areas. A significant portion of this investment will address housing needs for urban poor and middle-class families, which is expected to boost the demand for residential properties in Hyderabad. "This budget envisages sustained efforts on productivity and resilience in agriculture, employment and skilling, inclusive human resource development, urban development, infrastructure, and next-generation reforms," said Sitharaman during her budget speech.
Plans for Transit-Oriented Development (TOD) in 14 large cities, including Hyderabad, will enhance connectivity and stimulate economic growth in peri-urban areas. This development is poised to make regions like the western corridor more attractive for real estate investment. The budget also introduced policies to enhance rental housing availability and comprehensive land-related reforms, including the digitization of land records, which will facilitate smoother property transactions and attract more investors to the Hyderabad market.
Our focus is on making Telangana a beacon of growth and development. By enhancing infrastructure, promoting industrial growth, and ensuring robust urban planning, we are committed to transforming Hyderabad into a prime destination for real estate investment.
Revanth Reddy, Chief Minister of Telangana
Venu Dantuluri, Co-founder of Aryavarta Infraventures, offered his perspective: the reduction in the holding period for long-term capital gains from 36 to 12 months aligns REITs with listed equity shares, potentially increasing the popularity of this asset class in India. This adjustment is likely to enhance the appeal of REIT products, potentially leading to increased investor participation in the market.
TS Naidu, Co-founder of Aryavarta Infraventures and developer of Viridā, remarked: the government's initiative to modernise India's outdated land documentation system through digitalisation is a pivotal development. This move towards transparent and readily accessible land records is poised to streamline property transactions, mitigate disputes, and foster investment. Such progress is likely to yield benefits not only for the property sector but for the wider economic landscape as well.
Predictions for Hyderabad's Real Estate Market (2024-2029)
The real estate market in Hyderabad is poised for significant growth over the next five years, with projections indicating substantial increases across residential, commercial, and land segments.
Residential Property Outlook In 2024, residential property prices are expected to range from ₹5,500 to ₹6,500 per square foot on average. By 2029, these prices are projected to escalate to between ₹8,000 and ₹9,000 per square foot. This represents a potential increase of 45% to 38% over the five-year period, reflecting strong demand and continued development in the city's housing sector.
Commercial Real Estate Trends The commercial property market is anticipated to experience even more robust growth. Starting from a range of ₹7,000 to ₹8,000 per square foot in 2024, prices are expected to rise to between ₹9,500 and ₹10,500 per square foot by 2029. This projected increase of 35% to 31% underscores Hyderabad's growing importance as a business hub and the consequent demand for office and retail spaces.
Land Value Projections Land prices in Hyderabad are also set for significant appreciation. In 2024, land is valued at approximately ₹30,000 to ₹35,000 per square yard. By 2029, these prices are anticipated to reach ₹40,000 to ₹45,000 per square yard, marking an increase of 33% to 28%. This growth reflects the city's expanding boundaries and the increasing scarcity of prime land within city limits.
Factors Influencing Growth Several factors are expected to drive this growth:
Continued expansion of Hyderabad's IT and pharmaceutical sectors
Improved infrastructure, including road networks and public transportation
Government initiatives to attract investment and promote urban development
Rising population and increasing demand for housing
Growing interest from NRI investors and domestic buyers from other states
Potential Challenges While the outlook is generally positive, potential challenges that could impact these projections include:
Economic fluctuations at national and global levels
Changes in government policies affecting real estate
Possible oversupply in certain segments or localities
Environmental concerns and sustainable development requirements
Investors and homebuyers should conduct thorough research and consider seeking expert advice to make informed decisions in this dynamic market.
The Western Corridor (Shankarpalle and Mominpet) Forecast
Shankarpalle, residential property prices are expected to increase from ₹4,500 - ₹6,000 per square foot in 2024 to ₹6,000 - ₹8,500 per square foot by 2029. Commercial property prices are projected to rise from ₹7,000 - ₹9,000 per square foot in 2024 to ₹9,500 - ₹12,000 per square foot by 2029. Land prices in Shankarpalle are anticipated to grow from ₹25,000 - ₹28,000 per square yard in 2024 to ₹34,000 - ₹38,000 per square yard by 2029.
Mominpet, on the other hand, offers more affordable investment opportunities with considerable growth potential. Residential property prices are expected to rise from ₹2,500 - ₹3,500 per square foot in 2024 to ₹3,500 - ₹4,500 per square foot by 2029. Commercial property prices will likely increase from ₹4,000 - ₹5,000 per square foot in 2024 to ₹5,000 - ₹6,000 per square foot by 2029. Land prices in Mominpet are projected to grow from ₹10,000 - ₹12,000 per square yard in 2024 to ₹15,000 - ₹17,000 per square yard by 2029.
The Union Budget 2024-25 brings promising prospects for Hyderabad's real estate market, with particular benefits for its western corridor. Strategic location, infrastructure development, and governmental initiatives create an ideal environment for property investment. As Hyderabad continues to grow, investing in its real estate market, especially in regions like Shankarpalle and Mominpet, offers stability and potential high returns, making it a lucrative addition to any investment portfolio.
Samir Patra, Head of Thematic Design and Architecture at Viridā Estates, provided a succinct overview of the situation: the holistic approach to effective urban planning, encompassing transit-oriented development and improved infrastructure for essential services such as water supply, sewage treatment, and waste management across urban centres, is poised to significantly enhance the quality of life in modern India, bringing it more in line with standards seen in developed nations.
Indu Vardhan Reddy, Vice President of Business Acquisition at Viridā, expressed strong confidence in the Hyderabad market: the demand for properties in Hyderabad is robust, driven by strategic investments, meticulous urban planning, and substantial employment opportunities. The continuous influx of investments and the expansion of infrastructure have instilled immense confidence among buyers. Hyderabad’s real estate market is not just growing; it is thriving, and this trend is set to continue as more companies establish their presence here, generating jobs and driving the need for quality housing.
Hyderabad's Real Estate Boom: Why Now is the Perfect Time to Invest Post-Budget 2024-25
The timing for property investment in Hyderabad has never looked better. The Union Budget 2024-25 has underscored promising support for the real estate sector, with substantial allocations for infrastructure, housing, and urban development. The collaborative efforts of both the state and union governments over the past four years have set the stage for transformative changes in Hyderabad's property market.
The announcement of major initiatives such as the Pradhan Mantri Awas Yojana Urban 2.0, investment in transit-oriented development, and the establishment of new industrial parks aligns perfectly with Hyderabad's ongoing growth trajectory. Additionally, the focus on infrastructure enhancement and the development of the Hyderabad-Bengaluru industrial corridor will further stimulate the property market, creating ample opportunities for investors.
As the city continues to attract substantial investments and new industries, the real estate sector is poised for significant growth. For those looking to capitalize on Hyderabad's expanding market, now is an opportune time to invest. The promising outlook, backed by strategic governmental support and infrastructural advancements, ensures that Hyderabad remains a top choice for property investors aiming for stability and long-term gains.
