Hyderabad: Higher demand for 3 BHK residential units

Hyderabad is witnessing a paradigm shift in demand for 3 BHK residential units when compared to 2 BHK units with buyers expressing a clear preference for larger homes. This was evident from the fact that there was an increase of about 3-10% in demand for 3 BHK units in the city in Q3 2013.

Reasons for demand:

What are the factors that influence buyers to prefer 3BHK residential units when compared to 2 BHK units in Hyderabad? One of the major reasons for this is due to the fact that there is very little price difference between 2 and 3 BHK units. The price difference between the two is only about 12-15 %, which has prompted buyers to prefer larger houses with more facilities.

The increase in the purchasing power of buyers with more of them having higher disposable incomes has also been a contributing factor in the increased demand for 3 BHK units in the city.  Incidentally, the city has moved beyond being an IT hub to attracting business in other sectors like manufacturing, pharma, service, transport, trade and commerce, communication, real estate and retail. This has brought in people from different parts of the country who have made Hyderabad their second home due to employment and business requirements.

Even though the city has opened its economy to different sectors besides IT, it earns most of its revenue from the IT/ITeS sector. Since the IT hubs are concentrated on the western part of the city, most of the employees working in IT firms here prefer staying in the vicinity of their workplace. This has resulted in considerable demand for spacious residences in the west of Hyderabad. With 3 BHK residential units, particularly apartments, catering to their housing requirements in terms of space and other amenities, the demand for such units has been huge in recent times.

Demand higher in west Hyderabad:

Some of the areas in this locality where there has been considerable demand for 3 BHK residential units are Hitech city, Gachibowli, Madhapur, Miyapur, Chandanagar, Kukatpally, Madinaguda, Kondapur, Manikonda etc.  What has enhanced the demand for such units in these areas is the easy connectivity to different parts of the city through the Outer Ring Road (ORR) as well as the social and physical infrastructure facilities available in these areas. The average size of 3BHK residential apartments in these areas is between 1200-2200 sq.ft. The price range for these units is between Rs.3200-4600 per sq.ft. Effectively, such units would cost anything between Rs.40-95 lakhs. Areas like Hitech city, Gachibowli and Madhapur are higher priced both in sale as well as rental terms.

Demand in other areas:

Other areas where there is considerable demand for 3 BHK residential units are Banjara Hills, Jubilee Hills, Sanath Nagar, Secunderabad, Nanakramguda, Ameerpet etc, in that order. Considering that Banjara Hills and Jubilee Hills are upmarket areas in the Central Business District (CBD), the demand for 3 BHK units is more among the rich and affluent. The size of 3 BHK residential apartments in these areas ranges between 1500-3000 sq.ft. The price of such units in these areas ranges between Rs.75 lakh-3 crore depending on the size and other amenities. The rental for such units ranges between Rs.25,000-50,000 per month.

Future prospects and realty impact:

Due to the increasing demand for 3 BHK units in areas particularly on the west of the city, it presents a fantastic opportunity for developers to tap into this lucrative segment. This will prompt many more developers to enter the fray to developer larger homes to cater to the increasing demand for such homes.