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Hyderabad's residential real estate market has seen a sharp downturn, with home sales falling by 58% in Q1 FY25 year-on-year and by 38-43% over the past three quarters. Luxury housing, once a key growth segment, now faces a glut, with over 28,000 unsold units and 20 months of inventory. The city also leads in office space vacancy among India's top seven metros, with 28 million sq ft lying vacant. Developers are shifting focus toward affordable housing and delaying premium launches. In contrast, Pune and Bengaluru continue to show resilience, driven by steady demand and robust employment trends.
Real estate sales in Hyderabad, once one of the fastest-growing property markets in the country, have dropped sharply over the past three quarters, with unsold stock piling up and luxury housing demand cooling. The city's residential sales declined by 38-43% in the last three quarters, according to data from PropEquity. In Q1 FY25 alone, Hyderabad saw a 58% drop in home sales compared to the same period last year. Advertisement
This fall has been particularly steep in the luxury housing segment, where several projects launched during the post-COVID boom remain unsold. According to Anarock, about 70,000 to 90,000 new housing units entered the Hyderabad market between 2021 and 2023. However, absorption has failed to keep pace, leaving over 28,000 luxury units unsold as of Q1 2025.
The excess inventory now represents 20 months of supply, which is among the longest across India's top real estate markets. Despite a strong pipeline of new launches, especially in the upscale western suburbs like Kokapet and Gachibowli, buyers are increasingly delaying purchases. Many cite price sensitivity and limited income growth as reasons for holding off, especially in premium and mid-segment housing.
Adding to the oversupply concern, Hyderabad also has the highest office space vacancy among the top seven cities in India. Anarock data shows that 28 million sq ft of office space in the city is currently vacant, much of it delivered recently. The combination of a high residential and commercial inventory has prompted developers to shift their focus toward smaller, affordable units.
In terms of new launches, developers are expected to target lower ticket-size housing projects and delay premium launches until market absorption improves. Industry experts also anticipate that pricing may remain stable or even correct marginally in the coming quarters, depending on how quickly the existing inventory gets absorbed.
In other related real estate news, the Pune and Bengaluru housing markets have shown better resilience in Q1 FY25. Bengaluru witnessed steady end-user demand, while Pune's growing IT and industrial base continued to support mid-income housing sales. The contrasting performance between these cities and Hyderabad highlights how local employment trends, infrastructure delivery, and pricing play a crucial role in shaping buyer sentiment.
As Hyderabad navigates this correction phase, developers are likely to recalibrate their portfolios to align with demand, offering more compact and affordable units while holding back on speculative premium launches. Analysts say this could stabilise the market over time, provided the broader economy remains on track.
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