Hyderabad's rental market has experienced a significant increase in rent prices in the first half of 2023, driven by a growing demand for residences near workplaces as businesses return to regular operations. Employees are seeking housing options close to their offices, particularly around tech parks and commercial areas. This shift has created a competitive housing market with a supply-demand imbalance, prompting landlords to raise rents by over 20%. About two-thirds of tenants in Hyderabad have expanded their rental budgets to adapt to the changing real estate landscape, with many desiring more spacious living arrangements. Additionally, the demand for standalone buildings has increased due to the shortage of gated communities.
As Hyderabad's work dynamics revert to regular patterns, the city has witnessed a significant change in tenant behaviours. A substantial hike in rent, particularly in the first half of 2023, emerges as the standout trend, as reported by NoBroker's real estate study for January-June 2023.
This surge in rental costs stems primarily from a renewed demand for residences close to workplaces. As businesses reclaim their usual operating procedures, employees are gravitating toward living options near their offices. This preference, especially prominent around tech parks and commercial areas, has led to a competitive housing market due to a supply-demand mismatch.
Landlords, spotting this trend, have capitalised on the situation, with many hiking their rents by over 20%. The phenomenon, however, isn't exclusive to Hyderabad. Rental prices across the nation are on an upswing, underscoring the broader patterns of post-pandemic economic adjustments.
Hyderabad's data paints a striking picture: about two-thirds (66%) of its tenants have expanded their rental budgets in response to the city's current real estate climate. This adjustment perhaps also mirrors the changing landscape of work and living preferences. Many tenants now desire more expansive living spaces, possibly a residual effect of the extended hybrid work models adopted during the pandemic years.
A significant revelation from the study is the shift in the type of properties in demand. Gated communities, always in high demand, are facing an acute shortage. This shortage is pushing a large chunk of Hyderabad's populace (59%, to be precise) to prioritise standalone buildings despite the associated higher costs. The primary motivation behind this shift seems to be the proximity to workplaces and educational institutions.
Moreover, about 30% of the city's landlords have reportedly increased rents, viewing it as a strategy to offset the losses incurred during the pandemic.
In conclusion, Hyderabad's rental market is undergoing profound transformations. As residents prioritise proximity to work and spacious accommodations, landlords are adjusting rates in response. As the city navigates this new normal, both tenants and property owners will need to recalibrate their expectations and strategies.
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