A prime reason for dampened transaction activity in real estate markets is the mismatch betweenconsumer expectation and the available supply. Can the supply be better aligned with consumerpreference to break this logjam in the residential real estate market? In this first edition of the fifth yearof PropIndex, we take a closer look at consumer preference on various parameters for each city covered inthe study. The insight gained from this consumer analysis can assist in better positioning of projects andlead to better transaction activity in the market.

For example, about 60% of consumer preference is for budget segments in the sub Rs 70 Lakh range.Even within this range, 62% preference is in the sub Rs 50 Lakh budget segment. Further, 41% ofconsumer preference is for 2BHK formats. Therefore, one solution for overcoming the high capital value(s)(Rs/sq ft) can be to develop smaller and smarter formats in the 2BHK category. This can addressaffordability issues by keeping the overall acquisition cost low for consumers. Developers at present seemto be focusing on introducing larger 3BHK category to increase per unit revenue with smaller inventory tosell. Such mismatch between supply and demand is leading to increase in stock of unsold inventory.

Some of the other aspects which the study highlights are top preferred localities for each budgetsegment, top preferred budget range for 3BHK and 2BHK formats, associated top localities and more.

We’ve also attempted a deeper dive into an analysis of consumer preference in a select locality withineach city. PropIndex has access to data on >10,000 such localities across the country. For these localities,we’ve fleshed out the demand parameters on the basis of budgets, BHK preferences and more.

Coming to PropIndex for Apr-Jun 2015 quarter, in line with the tepid activity in the market, the NationalProperty Index witnessed marginal increment. This increment was on account of increase in supplyaccompanied by marginal increase in capital values. Whereas Bengaluru had the highest appreciation inthe City Index at 6%, Delhi saw the biggest decline of 3%. Overall, cities in the west and south saw anappreciation in respective City Index values while north saw a decline.

The City Price Monitor also witnessed a similar trend with Bengaluru and Delhi at opposite ends of thespectrum. The movement in their City Price Monitor was 3% and -5%, respectively. The rental market wasalso fairly stagnant.

These are changing times and we would love to hear from you. Do write to us atSudhir.pai@timesgroup.com and share yours views on this report and how we could make PropIndexeven better.

You may also share your opinion with #PropIndex on our Twitter handle @magicbricks or connect with uson Facebook at www.facebook.com/ magicbricksTOI.

FOREWORD

Sudhir PaiCEO, Magicbricks.com

IntroductionThis edition of PropIndex is a departure fromthe earlier ones as instead of looking at thedemand-supply analysis at the zonal levelfor each city, it takes an in-depth look at theConsumer Preference in each city acrossvarious parameters. The supply for each cityis captured in the macro level analysis of thelistings data to arrive at the nature andquantum of supply and price movement.The Magicbricks PropIndex is the same ascarried in the previous editions of PropIndex. Consumer Preference AnalysisThe objective of Consumer PreferenceAnalysis is to identify the nuances ofdemand across pertinent parameters toarrive at a holistic picture of what consumerswant in each city. Consumer PreferenceAnalysis is based on the analysis of searchundertaken by consumers onMagicbricks.com. The parameters on whichthis analysis has been done are:lDistribution of consumer preference bybudget: This gives an assessment of the toppreferred budget segments to acquireresidential real estate in the city. It gives anoverall picture of the consumer profile forthat city and helps to understand the natureof demand.l Top Preferred localities by budgetsegment: It helps to understand the toplocalities which people associate with eachbudget segment. This also gives thelocalities in which people are searching forresidential options in a particular budgetrange. It gives the geographical spread ofconsumer preference by budget. Further, italso helps to assess the dominant budgetsegment(s) associated with each locality.Residential projects can be accordinglypositioned in these localities.lShare of the top localities in each budgetsegment: We evaluate the percentage shareof the top 5, 10 and 15 localities for eachbudget segment. This analysis helps toidentify the geographical spread ofconsumer preference in the city. A highpercentage share means consumers arelooking for options in fewer localities whilethe opposite means the consumerpreference is more wide spread. lConsumer preference by BHK categories:We look at the consumer preference by BHK(Bedroom-Hall-Kitchen) category. Thisrelative percentage split across various BHKcategories gives an impression about theoverall affluence of the consumers. The

larger sized 3BHK category tends to have anoverall higher acquisition cost. Largepercentage of consumers preferring 2BHKcategory is indicative of price sensitiveconsumers making efforts to keep theoverall acquisition cost low. lConsumer preference in the 2 & 3BHKcategories: This is a micro-level analysis ofthe two most preferred BHK categories inthe country. Here we look at the mostpreferred localities and budget segments foreach category. In addition, we also identifythe top preferred localities for each budgetsegment. This information helps tounderstand the BHK category which aconsumer associates with each budgetsegment in a given locality. The residentialprojects can be positioned accordingly interms of price points and BHK formats. Thisanalysis has been done separately for 2BHKand 3BHK categories. l Top 10 localities by consumer preference:Here we identify the top 10 preferredlocalities by consumers for each city andtheir share of consumer preference. A highpercentage share indicates the consumerpreference is spread across lower number oflocalities and vise-versa. l Locality level analysis: In addition to themacro-analysis to understand consumerpreference at city level, a further granularanalysis has been undertaken at the localitylevel. This has been done for one locality percity where the top preferred locality hasbeen subjected to this analysis.The objective of locality level analysis is tounderstand consumer behavior at the micro-level and identify the main attributeswhich consumers associate with a locality.The parameter under which analysis hasbeen undertaken is a sub-set of what hasbeen done at the city level. This involvesaspects like preferred residential type, BHKand budget preference and preference under2BHK & 3BHK categories.

Magicbricks PropIndexMagicbricks PropIndex is a tool whichempowers property seekers and investorswith detailed information on the movementof residential apartment prices and supply ofproperties in India. No credible propertyindex can be a function of direct values asthe changes are governed by multiplefactors. Magicbricks PropIndex has takenthis reality into account and produced anindex based on listings of apartments andtheir capital and rental values on the

website. “Magicbricks has over 12.00,000active properties posted by more than 2 Lakh active users in 585+ cities and17,000+ localities. Our users includeowners, agents and developers.”

MethodologyApartment values are based on listings onthe Magicbricks site.These include multi-storey apartments andsingle units on plotted developments,referred to as builder floors onMagicbricks.com.The Index is structured in such a way thatindividual properties are aggregated intotheir respective cities and then to theNational Index. Weightages for PropIndexare based on the supply of properties withinthe locality/city. Based on this structure,PropIndex gives a realistic picture of trendsin price/supply across different propertymarkets. We have used different weightagesfor Listed Price Monitor/Rent Monitor.Therefore, PropIndex along with tablesprovided for Listed Price Monitor, RentMonitor, Yield Monitor and Capital Values,gives an excellent perspective of theproperty market performance in the quarter.While listing sand their values/supplyprovide a level of understanding of themarket, there are meticulous data checks toprevent aberrations creeping in. These arebased on statistical calculations, industryinputs and logical interpretations.The National Property Index (NPI) isindicative of the extent of activity as well asprice movements across cities and localitiesin the major active cities onMagicbricks.com. The index includes the top11 cities, chosen based on their activitylevels, has an individual city report for each.While the NPI and its movement is ofinterest to the expert community of bankers,builders and investors, the PropIndex hasalso taken care to explain the nuances of theindex movements at the locality level thatwould help the huge data base ofMagicbricks.com consumers.The PropIndex is the result of meticulousresearch at the locality level and throughdetailed discussions with experts atMagicbricks.com’s offline and onlineinitiatives. The Indian real estate market isdynamic and the PropIndex reflects thosechanges. Since it is derived from a dynamicdatabase, additions and deletions oflocalities happen as a function of changingmarket dynamics.

METHODOLOGY

There is a wealth of information within these pages. For better readability, we have presented some data as tables and others asgraphs. Between them, you will find how property markets have performed in the Apr-Jun 2015 quarter from differentperspectives – from that of capital appreciation, from a rental/yield realisation perspective and from a supply standpoint. DemandAnalysis section also explains what consumers look for.

We recommend that you evaluate the city report in its entirety and that will provide a rounded perspective of the performance ofthe property market within each city. Here are the details of what you will find in each of the city reports enclosed within:

1. City Property Index – This is a composite index which is a function of supply of properties as well as the average capitalappreciation/drop in various localities of the city in the quarter. The City Index is the weighted average of the average rate persquare foot in that locality and the supply of properties from that locality. Premium localities (with higher average rate persquare foot) as well as localities with higher supply of properties will have a bigger impact on the Index. For example, if thesupply of properties from a premium locality drops, that locality will end up having a lower weightage in the Index which inturn will push the Index downwards (and vice-versa). On the other hand, supply of properties remaining unchanged, theIndex will be influenced by capital appreciation within the locality.

2. Listed Price Monitor – This metric shows the capital appreciation/drop within a locality and is calculated on the basis ofmovement in the “average rate per square foot” within that locality. By and large, the movement in the “average rate persquare foot” reflects capital appreciation/drop. However, in a few select cases, we have observed that the average rate persquare foot moves due to a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments,which command a higher per square foot rate, changes over the quarter). In these few circumstances, the Listed Price Monitorwill, in turn, reflect this input. Such changes have been explained in the text of the City Reports.

3. Rent Monitor – This reflects the rental appreciation/drop within a locality. It is calculated on the basis of movement in the“average rent per square foot” within that locality. By and large, the movement in the “average rent per square foot” reflectsrental appreciation/drop. However, in a few select cases, we have observed that the average rent per square foot moves due toa change in the mix of apartments within that locality (e.g. if the ratio of premium apartments, which command a higher persquare foot rent, changes over the quarter). In these few circumstances, the Rent Monitor will, in turn, reflect this input. Suchchanges have been explained in the text of the City Reports.

4. Yield Meter – Yield is the annual rate of return earned on property. The Yield Meter depicts the gross yield percentagesacross various localities. Gross yield is a ratio of average annual rental value to the average capital value of the property.

5. Capital Value Tables (given in Annexures) – This shows the actual range of prices within which properties were available ineach locality in the quarter. Prices are shown in Rupees per square foot basis, these are the prevailing rates for properties ineach locality.

6. Consumer Preference Analysis – This analysis of consumer demand is based on searches and requirements that usershave performed on Magicbricks.com. The top localities by demand gives an insight into consumer preferences. The demanddata has been used to arrive at various aspects of consumer requirements including Budget-wise analysis, Property typeanalysis and BHK configuration analysis.

7. Editorial Speak – PropIndex has gone from strength to strength – adding more analytics, insights and diverse views inevery edition. To enhance the insights provided by our data, PropIndex now includes city perspectives from editors of theTimes Property.

GLOSSARY & DEFINITIONS

NOTES

APR-JUN 2015

In line with general lack of activity in theresidential real estate market, theNational Property Index (NPI) has also

witnessed minimal movement over theprevious quarter. This is in continuation ofthe general trend of inactivity observed overthe last 24 months (including the currentperiod between Apr-Jun 2015).

NPI is the weighted average of supply andvalues across 11 cities in India.

Regionally, north India comprising ofDelhi, Noida/Greater Noida, Ghaziabad andGurgaon saw a drop in index values.Compared to this, south and west Indiawitnessed a rise in index values of 4% and2%, respectively. Kolkata in the east alsosaw a drop in index values.

The Index movement in the current Apr-Jun 2015 quarter can be attributed to anaverage 26% increase in supply withmarginal price change. Only four cities sawsome positive movement in prices whileothers either stayed at the same level or sawan overall dip.

Bengaluru emerged as the city withmaximum increase of 6% in index values inthe current quarter. This was followed byHyderabad with 4% increase and Mumbai &Pune with 3% increase each. The largestdrop in city index was witnessed in Delhiwith the index values falling by 3%. Cities innorth India either witnessed a drop in indexvalues or remained at the same levels as inthe previous quarter. Ahmedabad was onesuch city which remained at the same levelduring this quarter.

While the Reserve Bank of India (RBI) didlower interest rates leading to banks passingon the benefit to consumers in terms oflower home loan rates, the same has nottranslated into transaction activity on theground. This general lack of interest byconsumers is also reflected in the HousingSentiment Index (HSI) report which saw afurther decline of 14% in consumersentiments in the Apr-Jun 2015 period.Further, for the first time, hitherto stablemarkets such as Bengaluru, also saw a dropin consumer sentiment.

The markets remain subdued with large

unsold inventory with pricing which wasbeyond the affordability range of consumerslooking to buy.

At the time of writing this report, RBI didnot reduce the Repo Rate as part of the thirdbi-monthly Monetary Policy Statement for2015. This is most likely to keep the homeloan rates at the current level. Consumers arelikely to adopt a further wait and watchpolicy in terms of their buying decision.

Various policy announcements by theCentral and state governments, such asSmart and Amrut cities plan, the list of citieswhich have applied for Smart City status,Make in India, Clean India and Skill Indiahave not enthused consumers to startbuying. Policy optimism needs to translateinto consumer enthusiasm.

IN THIS REPORT:

National Property Index...............1Hyderabad.................................4Annexures................................15

[National Property Index (NPI)]

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NATIONAL PROPERTY INDEX

The City Index for Ahmedabad remainedstable. An increase in supply across alllocalities was observed. Some localitiesposted double digit growth in supply, butmost had low base numbers initially. Over40% of supply in the residential segment isin the Rs 40 -70 Lakh segment.

More than 70% localities in Bengaluruposted an increase in average capital values.A slightly higher number saw an increase insupply as well. Overall, the Bengaluru CityIndex saw maximum appreciation in the lastquarter at 6%. Eastern and south-eastBengaluru comprising of Whitefield,Sarjapur Road and Electronic City was thelargest contributor to supply in the city.Bengaluru remains a price sensitive city withalmost 50% of consumer preference for theRs 60 Lakh budget segment.

Chennai City Index saw a marginalincrement of 1% in the index value. Whilethere was 52% increase in active listings inthe city, the Index remained subdued asonly 44% of the localities witnessed positivemovement in capital values. Overall, thePrice Monitor for the city fell by 1%.

Delhi witnessed a decline in City Index aswell the Listed Price Monitor. Whereas DelhiCity Index fell by 3%, the Listed PriceMonitor saw a decline of 5%. Delhi also sawan overall increase in active listings but only29% of localities saw any positive

movement in price points. In the 71%localities that showed price movements,most posted a decline in capital values.

Indirapuram and Raj Nagar Extensioncontinued to be dominant localities in termsof supply in Ghaziabad. Both togethercontribute more than 50% of total supply inthe market. As has been the general trend inthis quarter, the city saw an increase in thenumber of listings while the Listed PriceLevel remained the same as the last quarter.

In Gurgaon, while there was almost 30%increase in active market supply, a drop inthe average capital values arrested thegrowth of the City Index. Majority of thelocalities noted a rise or drop in the averagecapital values between -5 to +5 per cent.Close to 60% of the tracked localitieswitnessed a drop in average capital values.Sohna Road remained the most preferredlocality in the city.

At 4%, Hyderabad recorded the secondhighest increment in City Index Value afterBengaluru. Western Hyderabad, centered onGachibowli and comprising of otherlocalities like Manikonda and Kondapur,continued to be top localities in terms oflistings. Localities witnessed an average 2%increase in property values. The city also sawan increase in the overall number of activeproperty listings.

The City Index for Kolkata declined by 1%over the last quarter. The localities on an

average witnessed 1% increment in capitalvalues. However, only 45% of localitiesshowed positive movement in capital valueswhile the rest saw a decline of 1% to 7%.Consequently, even an overall increase inlisted properties could not lead to anysignificant change in the City Index.Rajarhat, EM Bypass and Garia continued tobe top localities in terms of availability ofactively listed properties.

Mumbai noted a positive movement inboth City Index and Listed Price Monitor.While the City Index improved by 3%, theListed Price Monitor saw an increase of 2%.The localities also saw an average increaseof 2% in capital values with 67% localitiesshowing positive movement in capitalvalues. Most localities along the WesternExpressway showed an increment in capital values.

Like other cities in the National CapitalRegion, Noida also saw a drop in City Indexas well as Listed Price Monitor. Where theCity Index dropped by 2%, the latterdecreased by 1%. Overall, capital values inall the sectors remained flat with only a fewmanaging between 3%-4% increase. NoidaExtension and sectors along the Noida-Greater Noida Expressway continued tobe the source of most active listings.

With 77% localities experiencing positivegrowth in capital values and an overallincrease in the number of active listings,Pune saw a 3% increase in City Index and a2% increase in Listed Price Monitor. Kharadiand Viman Nagar in north togetheraccounted for most listed properties. Apartfrom them, Wakad and Wagholi alsocontributed to the supply of actively listedproperties in the Pune real estate market.

NATIONAL CONSUMER PREFERENCEANALYSIS

Analysis of consumer preference onbudget lines and juxtaposing the same withavailable supply brings forth the mostimportant issue affecting the market –demand supply mismatch. It is importantto note that consumer preference revealedby search data on Magicbricks website hasbeen used here as a proxy for demand.

-1%

This demand-supply mismatch manifestsitself in two ways. Firstly, in the budgetsegments with strong consumer preference,the supply available falls short of requirement.But, supply exceeds demand in the higherbudget segments. Thus, there is a demandelement which is not serviced in sufficientnumbers while developers are concentratingprojects in the budget segments which havelesser demand.

Therefore, while the budget segmentbetween Rs 30 - 70 Lakh represents 50% ofoverall demand, the corresponding supply isonly 36%. For each individual budget segmentin this range, the average gap in demand andsupply is 4%. However, as the budget rangeprogresses, the mismatch first becomes zeroand then reverses trend i.e. the percentageshare of supply in these budget segments ismore than the percentage share of consumerpreference. Hence, while the Rs 1 Crore andabove segment comprises one quarter ofconsumer preference, the share of supply is36%. The budget segment between Rs 70 Lakhto Rs 1 Crore seems the only one which ismatched in terms of demand and supply.

The propensity of developers to launchprojects in higher budget segments is also

evident in the mismatch between BHK wisepreference and available supply. As the graphshows, while the 1 and 2BHK segments have ademand-supply mismatch, the situationreverses in case of 3BHK and above segment.

This mismatch adversely impacts theaffordability of home buyers. Formats of 2BHKare smaller in size (sq ft) and this helps to keepthe overall acquisition cost low. Almost 80% of2BHK options across 11 cities covered in thisstudy are under 1200 sq ft of built-up area.Within this range, the 1000-1200 sq ft built-uparea segment forms the largest componentwith 40% overall share. As compared to this,64% of 3BHK options are in the range of1200–1800 sq ft built-up area. Here again,1400-1800 sq ft range forms 46% of overallsupply. Therefore, for the same capital value(Rs/sq ft), a 3BHK of 1400 sq ft will cost atleast 27% more than a 2BHK with 1100 sq ft.

By this logic residential stock in the budgetand BHK segment with relatively less supplyshould be doing well. However, the subduedlevel of activity in the market belies this. Thereason being that projects within the budgetrange of a consumer may be situated inlocalities or zone of a city which is notpreferred while projects in preferred localitiesmay be out of budget range for a consumer.

Till this mismatch in consumer preference andsupply at various levels is addressed, alongwith improvement in economic condition, themarkets are likely to remain subdued.

03VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

Consumer Preference &Supply in BHK segments

The 17-acre Shetti Kunta Lake in Patancheru Mandal,Medak district was parcelled into 182 plots

Four housing societies in Hyderabad face trouble dueto illegal construction

Land Regularisation drive leaves out the poor inSecunderabad Cantonment area

Amazon, Google to launch their biggest campus outsideUS in Hyderabad

Micromax and Karbonn plan to invest Rs 400 - 500 croreto set up their manufacturing plants

Tata Consultancy Services sets up a Next-Gen TechnologySolutions Centre of Excellence in the city

Rs 20K cr infra boost to Hyderabad,Warangal and Nizamabad

20 multi-level flyovers to easetraffic in Hyderabad

AP govt to set up its own smartcities, independent of the Centre

Krishna delta is likely to be a 'no building zone'

Hyderabad offers best quality ofliving in India, a report says

Online building permissions tocome in effect soon

HYDERABAD 04VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

The City Index increased by 4% while the Listed Price Monitor saw a drop of 1%

[CITY INDEX]Hyderabad records the second highest increment in City Index after Bengaluru for Apr-Jun 2015 quarter

HYDERABAD REAL ESTATE IN PERSPECTIVE Q1 2015

As it happenedHyderabad

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[PROPINDEX - HYDERABAD]Hyderabad city witnessed the second highest gain of 4% in City Index. This was facilitated by an overallincrease in the average capital values for 60% localities and number of listings. The Listed Price Monitorsaw a slight drop of 1% as decrease in capital values in balance 40% localities negated increase in others.

l While there was an average increase incapital values across 60% localities, thebalance 40% saw a decrease. On accountof overall decrease, the Listed PriceMonitor also decreased by 1%

l Established and preferred localities likeMadhapur, Gachibowli, Kondapur andManikonda saw an increment

l The rental trend across the city was mixedand the analysis of the top 10 localities bynumber of listed properties reveals anaverage increase of 1%

l Hyderabad emerged as the most pricesensitive market among the major southIndian cities of Bengalur and Chennai

l Roughly 58% of preference was in the subRs 50 Lakh segment. This was highestwhen compared to 45% for Chennai andonly 33% for Bengaluru

l Suburban localities like Kukatpally,Miyapur, Kondapur, Madhapur andManikonda from the north-western to thewestern portion of Hyderabad dominatethe consumer preference across almost allbudget segments

l Geographical spread of consumerpreference in the city is more conservativeas compared to other major cities inpeninsular India. Consumers are lookingat lesser number of localities for theirresidential solution

l The 2BHK format dominates theconsumer preference in Hyderabad. Thisformat accounts for 53% of consumerpreference. For the 3BHK format, thesame number stands at 38%

l Miyapur is the most preferred locality inHyderabad city

l From supply side, there are pockets ofdemand-supply mismatch in the city.While the affordable segment is under-supplied, there is over-supply in thehigher budget segments

l As opposed to the 2BHK being thedominant segment by consumers, 3BHKdominates the listed supply in the market

[Key Takeaways]

The Telangana government's thrust onrevamping industrial policy has turned aroundthe negative sentiment especially after thebifurcation of the state, into a positiveperception. Hyderabad has the rightinfrastructure, radial connectivity and metrowhich will contribute to the turnaround in thereal estate development.

Residential property launches in andaround the city were moderate to stable duringthe second quarter. New launches mostlyhappened in the western part of the city andremained slow across the rest of the areas. Theresidential property market has been slowlypicking up despite the dip in home loanlending rates by 0.75%, flexible lending normsby various HFCs and banks and stable prices.The city has recorded a rise of 2% in valuesquarter-on-quarter, as per an industry survey.

On the supply side, apartments constituteda major portion followed by villas and plotteddevelopment projects during the secondquarter. The preferred categories continue torevolve around budget apartments lying atconvenient distance from the IT corridors ofGachibowli and Hitec City. The mismatchbetween demand and supply has dampenedthe residential market in areas like Gachibowli.

On the commercial front, there has been aspurt in the quantum of office space absorptionwith the IT corridor dominating the transactionactivity. While rentals witnessed appreciationin the IT and the extended IT corridor, healthyoccupier enquiries in select IT SEZdevelopments led to a marginal increase.

Hyderabad also saw an increase in newcommercial project completions and alongwith Mumbai accounted for a share of nearly

39% of the total supply released during thesecond quarter of the year.

On the infrastructure front, the GreaterHyderabad Municipal Corporation (GHMC) hasallocated a total budget of Rs 200 billion forinfrastructure development in the next fouryears. This includes development of 20 multi-level flyovers to ease traffic. The objective is toimprove the internal road connectivity.

The Regional Ring Road (RRR) planned bythe Hyderabad Metropolitan Development Plan(MDP) is under preparation. The stategovernment has approved 17 projects worth Rs 15 billion investment in a record 12 days’ inJune. In a related development, both MNCs andcorporates are now expanding andconsolidating their operations. This has given avirtual boost to the employment market thusleading to a revival in the housing sector.

Hyderabad realty update

V Nagarajan, Magicbricks Bureau

EDITORIAL

HYDERABAD 06VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

[Distribution of Consumer Preference by budget]Consumer preference on budget parameter is among the most conservative

[CONSUMER PREFERENCE ANALYSIS]

Budget 1 2 3 4 5

Upto 30 L Secunderabad Nagole Kukatpally Miyapur National Highway 9

Rs 30-40 L Kukatpally Miyapur Manikonda Nizampet Secunderabad

Rs 40-50 L Miyapur Manikonda Kukatpally Kondapur Madhapur

Rs 50-60 L Miyapur Kondapur Manikonda Hitech City Kukatpally

Rs 60-70 L Miyapur Kondapur Hitech City Secunderabad Gachibowli

Rs 70-80 L Hitech City Miyapur Kukatpally Madhapur Kondapur

Rs 80-1Cr Kondapur Gachibowli Kukatpally Madhapur Hitech City

Rs 1-1.6Cr Gachibowli Kondapur Manikonda Madhapur Hitech City

Rs 1.6 -2Cr Madhapur Gachibowli Hitech City Kondapur Begumpet

Rs 2-2.6Cr Banjara Hills Gachibowli Kukatpally Begumpet Kondapur

Rs 2.6-3Cr Banjara Hills Hitech City Kondapur Sri Nagar Colony Secunderabad

Rs 3Cr & Above Kondapur Hitech City Banjara Hills Secunderabad Jubilee Hills

[Top preferred localities by budget segment]Consumer preference is inclined towards western zone of the city

l Hyderabad has very conservative consumerpreferences by budget segment and it emergesas the most price sensitive market in SouthIndia followed by Chennai and Bangalore whichalso have similar consumer preference

l 58% consumers have preference in sub-Rs 50Lakh segment. This is highest when comparedwith Chennai (45%) and Bangalore (33%). Thisindicates a price sensitive market where anyspike in capital value will have negative imapct.

l Consumer preference in higherbudget segment is low. The Rs 50 Lakh – Rs 70 Lakh segmenthas 24% share, followed by 8.6% share of Rs 70 Lakh – Rs 1.0 Crore segment

l Sub-urban localities toward westand north-west of city likeKukatpally, Miyapur, Kondapur,Madhapur and Manikondadominate the consumerpreference across all budgetranges. Established premiumlocalities like Banjara Hills ispreferred destination in case of Rs 2 Crore and above segments

l Overall, seven localitiescomprising of Miyapur,Kukatpally, Manikonda, Kondapur,HiTech City, Gachibowli andMadhapur account for 29% oftotal consumer preference acrossall budget ranges

l These localities represent newdevelopment zone whichemerged alongside the advent of IT/ITeS hub in western part ofthe city

HYDERABAD07VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

Consumer preference is spread out more evenly in the city

[Share of top localities in each budget segment]

When consumer preference is concentrated in fewerlocalities, prices tend to go up as demand rises.When supply is spread across larger geography,demand spreads across more localities and thiskeeps a check on the rise in prices. This does notapply to those areas where supply is extremely highand property prices are very low.

l On an average, the top 5 localities account for 28% ofconsumer preference while percentages for the top 10and 15 are 43% and 52%, respectively. The share of thetop localities increases as we move up the budgetsegment (with the exception of Rs 2–2.6 Crore budgetsegment). For example, in case of the top budgetsegments of Rs 2.6-3 Crore and Rs 3 Crore & abovesegments, the share of the top 5 localities is 39% and47%, respectively

l The above statistics point to the fact that people associate premium with only a few localities in Hyderabad and look for options only in these localities

l In the price sensitive sub Rs 50 Lakh budget segment,five localities dominate the consumer preference acrossall individual budget segments

l However, as can be seen in the table on the previouspage, only 15 localities dominate the consumerpreference, irrespective of the budget segment

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[Consumer preferences in the 3BHK category]The 3BHK category addresses requirement in the higher budget segments

[Consumer preference by BHK categories]Consumers are looking for a format which helps keep acquisition cost low

l Seven localities in the western half of thecity dominate preference in the 3BHKcategory and account for 46% consumerpreference share

l In terms of budget, three budgetsegments i.e. Rs 50–60 Lakh, Rs 40–50 Lakh and Rs 60–70 Lakhaccount for 56% of consumer preference

l Further, 24% consumers are looking for3BHK options in the Rs 80 Lakh to Rs 1.3 Crore segment

l With the exception of Secunderabad areabeing the preferred locality for 3BHK inthe Rs 30–40 Lakh segment, localitieslike Miyapur and Manikonda in westernHyderabad dominate the consumerpreference for 3BHK apartments

Top PreferredLocalities

Top PreferredBudget Segment

[Top preferred localities for the 3BHK category and budget segments]Western suburbs dominate consumer preference in the 3BHK category

Budget (Lakh) 1 2 3 4 5

Rs 50-60 Miyapur Kondapur Manikonda Kukatpally Gachibowli

Rs 40-50 Manikonda Miyapur Attapur Kukatpally Secunderabad

Rs 60-70 Miyapur Kondapur Madhapur Hitec City Gachibowli

Rs 30-40 Secunderabad Hitec City Kondapur Gachibowli Kukatpally

l Being a highly price sensitive market,2BHK format dominates consumerpreference with 53% share. The share for3BHK format is 38%

l Consumer preference for 4BHK & aboveformat is miniscule at 4%

l The relatively smaller built-up area (sq.ft)of 2BHK category helps to keep theoverall acquisition cost low and allowsconsumers to seek options as per theirbudget range and locality preference

l 3BHK category on the other handaddresses requirement for larger and/or relatively more premium option in a locality

l This format would be filling requirementin the Rs 60Lakh and above segment

Consumers in a pricesensitive market islooking for 2BHKformat in order tokeep acquisition costwithin budget. And atthe same time hopingto secure moderatelysized apartment

HYDERABAD09VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

l Only 37% of consumer preference is concentrated in top10 localities in Hyderabad

l This low percentage share highlights the geographicalspread of consumer preference

l While consumers are looking at multiple localities,individual share of these localities relative to top localitiesis very low

l The preference is for localities which have emergedaround the IT/ITeS hub in Madhapur and Gachibowli

[Consumer preference in the 2BHK category]Consumers are looking for affordable options in the 2BHK format

localities with high capital values; here2BHK format assists a consumer to buyhouse in preferred locality by keeping theoverall acquisition cost low

l Consumers prefer western localities whenlooking for 2BHK options. Four westernlocalities of Miyapur, Kukatpally,Manikonda and Kondapur account for27% share in this category

l 2BHK apartments in premium budgetsegment are likely to have additionalrooms and amenities which add to overallacquisition cost. These might not bepresent in vanilla 2BHK options

Top PreferredLocalities

Top PreferredBudget Segment

[Top preferred localities for the 2BHK category and budget segments]Demand for 2BHK options is also concentrated in the western suburban areas

Budget (Lakh) 1 2 3 4 5

Rs 30-40 Miyapur Kukatpally Manikonda Nizampet Secunderabad

Rs 40-50 Miyapur Kukatpally Kondapur Manikonda Chandanagar

Rs <30 Secunderabad Nagole Miyapur Kukatpally National Highway 9

Rs 50-60 Miyapur Kondapur Gachibowli Madhapur Kukatpally

l 58% consumers looking for 2BHK optionsin Rs 30 Lakh to Rs 50 Lakh segmenthighlight market’s price sensitive nature

l Market has responded to this lowerbudget preference by making 50% of

2BHK houses in smaller built-up arearange. This allows keeping the overallacquisition cost low

l The 2BHK preference in relatively higherbudget segments is likely to be in

[Top 10 localities by consumer preference]Miyapur is the most preferred locality in Hyderabad

Demand in lowerbudget segments islooking for 2BHKformat to keep theacquisition cost low;preferably around theIT/ITES hub of the city

HYDERABAD 10VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

l Predominant consumer preference inMiyapur is for 2BHK segment. This isfollowed 3BHK segment; 1BHK and 4BHK& above segments form a miniscule part

l 2BHK category accounts for 64% ofpreference share followed by 3BHK with

33% share. 1BHK and 4BHK & abovesegments together have slightly morethan 3% share

l Historic analysis shows that share of 3BHKsegment has actually increased duringthis period

l The share of 3BHK segment has increasedby 6% over last 7 quarters to presentlystand at 33%; this shift in consumerpreference could be for projects in moreestablished portions of the locality whichhave started attracting spill-over demandfrom adjoining localities

[LOCALITY LEVEL ANALYSIS - MIYAPUR][Consumer preference by residential category]Apartments continue to be the most preferred format

[Consumer preference by BHK category (apartments)]Locality is witnessing slight increase in preference for 3BHK category

l As is the prevalent norm across the city ofHyderabad, preference for multistoryapartments dominates in the locality andaccounts for more than 50% of overallpreference numbers

l The second most preferred segment isthat of residential house. More than one-fourth of consumers prefer such anoption; Miyapur has many options inhorizontal development format which areavailable in form of villa, independenthouse/row house and builders floors

l Around 19% consumers prefer residentialplots for self construction of houses; theseoptions could either be individual plots orthose which are part of larger residentialtownship projects

l Availability, location and size ofresidential plot in the locality determineits capital and associated transactionvalue. It can either be a smaller plot in apremier location with high capital valueor larger plot with low capital value butsiutated less favourably

HYDERABAD11VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

l The graph shows the budget segmentsmost associated with consumerpreference in the locality and historictrend of this variable over 08 quarters,including April-May-June 2015

l It shows that consumer preference in nothomogenous and that each locality has adominant budget range associated with it.This is a reflection of both supply andconsumer’s perception about the locality

l Currently, Rs 30 Lakh – Rs 50 Lakhsegment dominates with 48% share of

consumer preference. The higher budgetsegments in Rs 50 Lakh – Rs 90 Lakhrange constitute another 37% share

l Though lower budget segments dominatethe consumer preference in the locality,trend analysis over last 8 quarters revealsincreasing share of some of the higherbudget segments

l While the share of Rs 30 Lakh – Rs 40Lakh segment has remained constant at23%, the share of Rs 40 Lakh – Rs 50 Lakhsegment has doubled from 13% to 26%.

This increase has come at the expense ofsub-Rs 30 Lakh segment whose share hasreduced drastically

l Similarly, share of Rs 50 Lakh-Rs 60 Lakhsegment has grown by 300% to reach22% from 8% in 2013. Other budgetsegments in Rs 60 Lakh – Rs 90 Lakhrange have also seen their share go up

l Increasing consumer preference in higherbudget segments points towardsmaturing profile of the locality. Though, itwill take some time to mature completely

[Top 10 budget segments for a given locality]Share of higher budget segments has increased

[Budget preference by BHK category]Consumers ascribe separate budget ranges for different BHK categories

l The graphs show the dominant segmentsthat consumers are searching for in the3BHK and 2BHK categories. These graphsoutline the budget ranges whichconsumers associate for each category

l Over 50% people looking for 3BHKoptions associate this format in Miyapurwith the range of Rs 40-60 Lakh. Around29% consumers are looking for options inthe Rs 60–80 Lakh segment

l Similarly, over 80% of those looking forthe 2BHK category are doing so in the Rs 30-60 Lakh bracket

l These trends are in line with overall BHKand budget preferences in the localitywhere the Rs 30- 60 Lakh dominates

3BHK 2 BHK

HYDERABAD 12VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

[SUPPLY ANALYSIS][Distribution of property listings by budget segment]Share of listings in premium and luxury segments is increasing

l The share of 2BHK and 3BHK formats insupply shows that development movingaway from consumer preference

l Compared to 2BHK being the preferredcategory, 3BHK dominates the listedsupply in the market

l The share of 4BHK&above segment insupply is also high as compared to shareof consumer preference

l The dominance of larger formats creates asituation of high acquisition cost to theconsumer. Even if the capital value(Rs/sq.ft) is relatively low, the large size ofthese formats makes the overallacquisition cost high

[Distribution of property listing by BHK category]Propensity to introduce larger formats in the market

l Hyderabad market has demand-supplymismatch in two broad budget segments

l While 81%+ consumer preference is in Rs 70 Lakh and below range, the

corresponding share of listed options isonly 62%

l In the Rs 70 Lakh and above segment,share of supply at 38% is more than

double the 18% consumer preferenceshare in this budget range

l This can create budget segments withover-supply and unsold inventory

Larger formats beingpushed into themarket to increase pertransaction value. Thistakes options in themarket away fromaffordability of mostconsumers

HYDERABAD13VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

[Key parameters – 2 BHK category]The 2BHK format caters to demand for affordable options

l The 2BHK segment represents thecategory which addresses requirement forrelatively affordable solutions

l Accordingly, 53% of listings as per budgetare in the sub Rs 50 Lakh segment whilein terms of built-up area, 65% propertiesare in the 700-1200 sq ft category

l Within the above built-up segment, 1000–1200 sq ft options constitute 43%share of supply. The built-up area optionsin the 2BHK segment help consumers tokeep the overall acquisition cost low

l Though, around a healthy 29% ofproperties in this format are also available

in the 1200–1400 sq ft built-up (sq ft)area range

l The built-up area ranges in the 2BHKsegment permit a consumer to eitheravail affordable options or acquireproperty in an expensive but preferredlocality at a lower overall acquisition cost

l The dominant built-up area (sq.ft) in3BHK category is 1,400 – 1,600 sq.ft with22% share. Overall, the range from 1,400 – 2,500 sq.ft accounts for 73% of active listings

l Only 14% of listed options are in 1,000 – 1,400 sq.ft range

l In terms of budget, Rs 50 Lakh – 70 Lakhsegment accounts for 23% share. Other

dominant segment is Rs 70 Lakh to Rs 90 Lakh which has a share of 18%

l A small percentage share of 13% is in theRs 90 Lakh to Rs 1.4 Crore segmen

[Key parameters - 3BHK category]Many options available in 3BHK format

HYDERABAD 14VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

l Localities such as Gachibowli and Kondapur, in Hyderabad, saw thehighest capital appreciation of 12% and 10 %, respectively. Bothlocalities are home to the world’s leading IT giants includingMicrosoft, CA, IBM, Oracle, Capgemini and Infosys and some otherssituated in Hitec City

l Gachibowli offers easy connectivity to areas such as Hitec City,Kondapur, Manikonda, Chanda Nagar, among other areas fallingunder the western IT belt of the city

l Kondapur offers great deals on buying premium homes at affordableprices as compared to the nearby Jubilee Hills. Other thanaffordability, Kondapur offers peaceful and green environment andopen spaces similar to Jubilee Hills

LISTED PRICE MONITOR

Locality Average Rental Average Capital Gross Value (Rs/sqft/mth) Value (Rs/sqft) Yield

Gachibowli 14.50 4265 4.08%Kondapur 12.50 3860 3.89%Manikonda 10.25 2775 4.43%Miyapur 9.25 3180 3.49%Banjara Hills 14.50 7050 2.47%Hitec City 13.50 4470 3.62%Madhapur 13.25 5065 3.14%Kukatpally 11.75 3390 4.16%Nizampet 7.25 2460 3.54%Chanda Nagar 10.00 2820 4.26%

Y I E L D M E T E R

RENT MONITOR

l Localities such as Kukatpally and Manikonda experienced rentalappreciation of 8% and 10%, respectively. Other localities such asMadhapur, Chanda Nagar, Banjara Hills and Hitec City witnessedappreciation between 2% to 4%

l Major part of Kukatpally is located in proximity to Hitec City,therefore IT professionals are contributing to the growth of demandfor rental accommodation here

l Manikonda is a commercial and residential hub of Hyderabad and islocated in close proximity to Hitec City, Gachibowli, Nanakramguda,Raheja IT Park and the IT hubs of Hyderabad. Therefore majority ofthe professionals prefer Manikonda for rent owing to its proximity tothe work spaces and affordability in prices

-1%

l With most localities witnessing a downward trendin rental yields, the average rental yield across thegiven localities has decreased over the previous one year.

l The city’s Yield Meter shows the relative rentalreturn on residential property across the past three

years. Yield is the percentage between capital andannual rental values at a given point of time. If abuyer purchases a house for a certain value X andreceives an annual rental return of Y, then the ratioof Y to X classifies the yield for the property. For thepurpose of given calculation, maintenance andother costs are not factored

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%Ghachi- Konda- Manidonda Miyapur Banjara Hitec Madhapur Kukatpally Nizampet Chanda bowli pur City Nagar

2015 2014 2013

List of 2013 that dropped offtop grosser list

l Madinagudal Uppall Begumpetl Jubilee Hillsl Nallagandlal Ameerpetl Attapur

HYDERABAD15VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

Capital Values – Locality WiseAverage Listed Residential Apartment Prices

Alwal 2160 to 2680

Ameerpet 3860 to 4690

Appa Junction 2920 to 3500

Ashok Nagar 4410 to 5150

Attapur 2700 to 3520

Bachupally 1760 to 2280

Bandlaguda 2750 to 3280

Banjara Hills 6350 to 8310

Barkatpura 3150 to 4280

Beeramguda 1800 to 2370

Begumpet 4270 to 5570

Bowenpally 2320 to 2910

Chanda Nagar 2700 to 3380

DD Colony 4350 to 5670

Dilsukh Nagar 2840 to 3750

Dr AS Rao Nagar 2120 to 2630

East Marredpally 4030 to 5310

ECIL 2070 to 2710

Gachibowli 3870 to 4970

Gopanapalli 3330 to 3770

Habsiguda 3220 to 4120

Hafeezpet 3570 to 4190

Himayath Nagar 4510 to 5790

Hitech City 4120 to 5100

Hitex 4040 to 4690

Hyder Nagar 3080 to 3700

Jubilee Hills 4920 to 6760

Kavadiguda 5130 to 5830

Kavuri Hills 4140 to 5020

Khajaguda 4000 to 5030

Kokapet 2930 to 3620

Kompally 2300 to 2820

Kondapur 3540 to 4440

Kothaguda 4020 to 5260

Kothapet 2500 to 3170

Kukatpally 3060 to 3980

LB Nagar 2680 to 3320

Lingampally-Serilingampally 2790 to 3400

Madhapur 4650 to 5810

Madinaguda 2950 to 3560

Malkajgiri 1860 to 2460

Manikonda 2570 to 3140

Mayuri Nagar 2650 to 3230

Mehdipatnam 3120 to 4050

Miyapur 2890 to 3700

Moti Nagar 3460 to 4280

Musheerabad 3490 to 4660

Nacharam 2790 to 3510

Nagaram 2030 to 2310

Nagole 2630 to 3100

Nallagandla 3190 to 3970

Nandagiri Hills 8260 to 9920

Narsingi 3100 to 3760

New Nallakunta 3810 to 4630

Nizampet 2240 to 2860

Padmarao Nagar 3140 to 3910

Pragathi Nagar 2180 to 2670

Puppalaguda 2670 to 3230

Rajarajeshwari Nagar 3030 to 3470

Rajendra Nagar 2570 to 3230

Sainikpuri 2310 to 2840

Sanath Nagar 4000 to 4990

Shaikpet 3620 to 4880

Sindhi Colony 4780 to 5730

Somajiguda 4940 to 6350

Srinagar Colony 4500 to 5930

Tarnaka 3700 to 4410

Tellapur 3250 to 4230

Uppal 2080 to 2660

West Marredpally 3390 to 4520

Locality Capital Values (Rs/Sq feet)

Locality Capital Values (Rs/Sq feet)

HYDERABAD

VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

D I S C L A I M E R

Every effort has been made to make this Index as complete and as accurate as possible. MagicBricks accepts no responsibility for inaccuracies inthe information/data contained in this book. It shall have neither liability nor responsibility to any person or entity with respect to any loss ordamage caused, or alleged to have been caused, directly or indirectly, by the information contained in this book. The information/data in this

book is subject to change from time to time due to market condition.

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