Residential high-rises in Hyderabad reflect the city’s expanding housing market, where unsold inventory has increased as new launches outpace sales. (DC File image)

Builders were building homes faster than buyers could absorb in Hyderabad, according to a report by Investment Information and Credit Rating Agency of India Limited (ICRA). It said 29.6 crore square feet of residential property remained unsold in the city.

The report said that at the current sales levels, it would take 2.4 years to clear the existing inventory, with launches exceeding sales every year since financial year 2024. The inventory stood at 1.6 years in March 2024.

The Confederation of Real Estate Developers' Associations of India-Hyderabad (Credai) painted a different picture of the data, claiming that the headline inventory metrics routinely misinterpreted Hyderabad because national algorithms ignored state-specific building norms.

Credai‑Hyderabad president‑elect B. Jagannath Rao told Deccan Chronicle that developers in Telangana secured complete master plan sanctions up-front for five-to-six year execution cycles, while 10 per cent of the permissible space was legally mortgaged with municipal bodies such as the GHMC and HMDA, and remained locked until the release of the final occupancy certificate.

"Treating a multi-year pipeline and encumbered mortgage stock as immediate unsold inventory creates a false impression of oversupply," he said.

"When broken down year-by-year across actual completion tranches, Hyderabad’s residential market reflects a healthy, well-planned supply curve that perfectly complements our booming Grade-A commercial expansion in the west and north corridors," Jagannath Rao added.

The ICRA report said Hyderabad accounted for nearly 30 per cent of the unsold residential space across India’s top seven housing markets. Despite the growing inventory, new housing launches were projected to rise by up to 33 per cent next year.

It said that the city also had the highest inventory overhang among the top seven cities — Bengaluru, Chennai, Kolkata, Mumbai Metropolitan Region, National Capital Region and Pune as well as Hyderabad.

The report said Hyderabad witnessed robust launches, higher by 76.7 per cent year on year (YoY), mostly in the southwest region.

Hyderabad was the second-largest residential real estate market among the top seven cities, ICRA said, accounting for around 18 per cent of the area sold in FY2026. Area sold rose moderately by 4.1 per cent to 118 msf (million square feet) in FY2026, supported by a 26 per cent spike in luxury segment sales after a steep correction in the previous year

In the first quarter of FY2027, area sold grew by 17.3 per cent, driven by robust and lumpy launches, it said. ICRA estimated the full-year growth at 11-14 per cent in FY2027.

The report said the western region continued to lead Hyderabad's residential market, with the northwest and southwest corridors accounting for 85-90 per cent of sales and launches. Key micro-markets such as Kokapet, Neopolis, Tellapur and Khanapur were driven by proximity to IT hubs, strong connectivity, social infrastructure and spillover demand from saturated locations.

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