Hyderabad Housing Sales Drop 58% in Q1 FY25

Hyderabad’s once-thriving housing market is witnessing a sharp downturn, with residential sales plunging 58% in Q1 FY25 compared to the same period last year.

According to PropEquity data, the decline reflects a sustained slowdown that has persisted over the past three quarters, driven primarily by waning demand in the luxury housing segment. Once among the fastest-growing property hubs in India, Hyderabad now faces a stockpile of unsold residential units. Industry analysts attribute this to overambitious launches during the post-COVID boom and a lag in absorption. Anarock estimates that between 70,000 to 90,000 housing units were launched in the city between 2021 and 2023. However, as of Q1 2025, over 28,000 of those, mostly luxury units, remain unsold. This excess inventory equates to nearly 20 months of supply — among the highest across India’s top real estate markets. Despite a robust pipeline of launches in western suburbs like Gachibowli and Kokapet, developers are now facing increasing buyer hesitation. Many prospective homeowners are delaying purchases due to price sensitivity and stagnant income growth, especially in premium and mid-segment categories.

Further complicating the outlook is the high vacancy rate in Hyderabad’s commercial real estate sector. Anarock reports that over 28 million square feet of office space remains unoccupied, much of it having entered the market recently. This dual oversupply — in both residential and commercial segments — is compelling developers to rethink strategy. Market watchers say that the current conditions are prompting a shift away from high-ticket projects toward smaller, affordable housing. Developers are expected to postpone premium launches and focus instead on compact, budget-friendly homes until absorption levels improve. Price corrections are also anticipated, with experts predicting a marginal dip or flat pricing in the near term, depending on how fast the inventory clears. In contrast, other major cities such as Pune and Bengaluru are displaying greater resilience. Bengaluru continues to benefit from steady end-user demand, while Pune’s expanding IT and industrial base is supporting sustained sales in the mid-income housing segment.

The contrasting performance highlights how local economic conditions, employment generation, and infrastructure readiness directly shape real estate sentiment. For Hyderabad, the current correction phase could pave the way for a more sustainable and demand-driven market — provided macroeconomic stability is maintained. As developers recalibrate their offerings, the success of Hyderabad’s housing market recovery will depend on how swiftly and effectively the excess inventory can be absorbed.

Hyderabad Housing Sales Drop 58% in Q1 FY25