Hyderabad’s once-thriving real estate market is now witnessing its sharpest correction in nearly a decade, with property sales plummeting between 38 and 43 per cent over the last three quarters—marking the steepest fall among India’s top nine cities.
A recent report by PropEquity attributes this downturn to a severe demand-supply mismatch and a glut of high-ticket residential launches that far outpace genuine buyer interest. With inventory overhang stretching to 20 months, the city’s housing sector is struggling to offload unsold stock, especially in the premium and luxury segments.
The downturn is particularly stark in upscale localities like Kokapet, where aspirational projects such as Poulomi Palazzo and SAS Crown introduced Hyderabad’s tallest residential towers. Despite their skyline-defining ambitions, these projects now symbolise the speculative excess that has burdened the city’s housing market. Property listings of 12,000 to 15,000 sq. ft. have few takers, with asking prices between ₹5 crore and ₹7 crore attracting limited interest. “Buyers in Hyderabad, unlike Mumbai, are not conditioned to large-ticket homes. The jump in scale and cost post-pandemic has alienated the core user base,” said a top executive from a housing finance firm.
From 2021 to 2023, annual new supply jumped from an average of 25,000 units to nearly 90,000 units, according to PropEquity data. This sudden increase, driven by post-COVID enthusiasm and unrestricted Floor Space Index (FSI) regulations, led developers to construct larger and taller buildings, anticipating continued demand. However, the surge in inventory was not matched by end-user interest, as many IT professionals—the city’s backbone workforce—found themselves priced out of the luxury bracket.Adding to the market’s fragility is a high share of speculative buying. Experts estimate that between 30 to 35 per cent of Hyderabad’s housing activity is driven by investors and short-term speculators, making the market prone to volatility. Only the National Capital Region (NCR) shows a similar pattern of speculative intensity. “Speculators bought into the hype, but real user demand has remained consistent and modest. The mismatch is stark,” said a leading property consultant.
The office segment, once Hyderabad’s stronghold, is also reflecting cracks. Despite 59 million sq. ft. of new completions since 2020, only 48.5 million sq. ft. has been absorbed. Vacancy now stands at a staggering 28 million sq. ft.—the highest among India’s top seven cities. As a result, many private equity players are eyeing the Hyderabad market for potential distress buys, anticipating opportunities in a cooling asset climate.
While some market watchers remain cautiously optimistic, others warn that unless pricing corrects further and new supply is curtailed, Hyderabad could face a prolonged slump. “These are early signs of a correction cycle,” said Vivek Rathi, Head of Research at Knight Frank India. “Luxury oversupply has happened in other cities too. The question is how quickly the market adapts.”As the city grapples with inflated pricing, oversized inventory, and limited affordability, the situation serves as a wake-up call for urban planners and developers alike. A more equitable and sustainable housing approach—grounded in real user demand, green development norms, and inclusive pricing—could help Hyderabad realign its urban growth story before confidence erodes further.
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Hyderabad housing sales slump amid oversupply
