Hyderabad Real Estate Stumbles: Sharpest Sales Drop Among Top Cities

Hyderabad’s once-booming real estate market is now grappling with a sharp downturn, recording the steepest decline in property sales among India’s major cities. Sales in the city dropped by 38–43% over the past three quarters, according to data from PropEquity. The city’s housing inventory overhang has reached 20 months — the highest in the country reflecting a sluggish market response to growing supply.

High-end housing, making up 20% of Hyderabad’s property space, is the worst hit. Unsold stock of residential units valued above ₹2 crore increased 6% annually to 30,320 units during Q1 2025, the maximum in major cities, as per Anarock Property Consultants’ data.

This glut has affected sellers such as Shekhar Reddy, a 52-year-old IT employee, who stalled plans to sell his apartment in Kokapet after getting low offers and lukewarm interest. “There’s no real demand for premium homes anymore,” he said.

The commercial segment isn’t faring any better. Since 2020, Hyderabad has added 59 million sq ft of office space, but only 48.5 million sq ft has been absorbed. The city currently holds 28 million sq ft of vacant office space — again, the highest among the top seven cities, according to real estate consultancy Vestian.

Experts blame a mismatch between demand and supply, driven by post-pandemic construction booms. Between 2021 and 2023, yearly housing launches jumped to 70,000–90,000 units from 20,000–30,000 in previous years.

Developers have been attracted to Hyderabad’s liberal Floor Space Index (FSI) and constructed ultra-luxury towers such as Poulomi Palazzo (55 floors) and SAS Crown (57 floors) in Kokapet, featuring apartments up to 15,000 sq ft in size sizes rare in the city but these high-priced projects, often costing ₹5–7 crore, have limited buyer interest.

“Prices doubled too quickly post-COVID from ₹5,000 per sq ft to ₹13,000 and now back to ₹9,000. But buyers aren’t biting,” said a real estate firm CEO.

With 30–35% of the market driven by investors and speculators, volatility remains high. As a result, private equity firms are now eyeing distress deals. “We’re waiting for the right moment,” said the head of a PE fund.

Still, experts like Vivek Rathi of Knight Frank caution that it’s too early to panic. “If trends persist, it could become a concern. But not yet.”