High Inventory, High Prices: The Paradox of Hyderabad’s Real Estate Market
Hyderabad’s real estate market is scaling new heights, driven by a massive surge in the sale of premium and luxury homes. While developers are cashing in on the demand for high-end properties priced above Rs 1 crore, the dream of homeownership is rapidly slipping out of reach for the city’s middle-class and common buyers.
According to a report by Hindustan Times, the first quarter of 2026 (January–March) indicates steady market growth. Defying the slowdown seen in other major Indian cities, Hyderabad recorded a one percent year-on-year growth with 9,541 residential units sold. The highest demand was observed in the Rs 1 crore to Rs 2 crore price bracket, which accounted for 4,061 units, while properties priced above Rs 2 crore also saw strong sales. Concurrently, average property prices in the city have risen by nine percent compared to last year, reaching Rs 8,211 per square foot.
Corporate developers are swiftly capitalizing on this trend. Bengaluru-based Brigade Group recently acquired 5.72 acres of land in Osman Nagar for a record Rs 44 crore per acre. The company’s Executive Director, Amar Mysore, confirmed plans to develop a premium residential project on the site. Similarly, Prestige Group sold 1,700 flats in its ‘Prestige Golden Grove’ project in Tellapur within just two weeks, generating over Rs 2,500 crore in revenue.
The state government attributes this real estate boom to rapid IT and industrial expansion, investor-friendly policies, and heavy infrastructure development. Roads and Buildings Minister Komatireddy Venkat Reddy stated that the government is committed to planned urban development under the "Telangana Rising 2047" vision. He explained that over Rs 40,000 crore has been allocated for infrastructure, enhancing connectivity through projects like the Outer Ring Road (ORR) and the Regional Ring Road (RRR).
However, this rapid premiumization has created a severe affordability crisis. Western Hyderabad areas like Kokapet, Gachibowli, Narsingi, and the Financial District are now dominated by spacious 3BHK and larger apartments. NoBroker mentioned in its report that 80 percent of available apartments in the market are 3BHK or larger, with an average size of 2,050 square feet and a starting price exceeding Rs 1.6 crore. The report also noted that 84 percent of buyers looking for homes under a Rs 1 crore budget are facing extreme stress due to a glaring mismatch between supply and demand.
Commenting on the shifting market dynamics, Mudit Gupta, Head of Anarock Group in Hyderabad, stated, "Currently, the demand is for quality, not quantity."
Interestingly, despite the sales momentum in the luxury segment, a paradox exists within the market. ICRA noted in its report that Hyderabad currently holds the highest volume of unsold inventory among major Indian cities, which is estimated to take nearly two years to clear.
As Hyderabad cements its status as a haven for premium homebuyers, the widening gap between soaring property prices and limited affordable housing remains a critical issue. Balancing this high-speed development with the capacity of urban infrastructure continues to be a major challenge for city planners and the government.