Hyderabad Defies National Slowdown With Rising Prices, Steady Sales in 2026
While most of India's top housing markets cooled down in early 2026, Hyderabad kept moving. In India, residential sales have declined on a year-over-year basis by 4 per cent to 84,827 residential units in Q1 2026 compared to Q1 2025, according to a Knight Frank report, a city-wise breakdown shows how Hyderabad moved against this downward trend. The city recorded a total of 9,541 housing sales during the January-March period, and when compared with the data from Q1 2025, the sales have increased by 1 per cent, an improvement when housing sales across the top eight cities in India have declined.
The real story, however, is pricing. Average property prices in the city have risen by nine percent compared to last year, reaching Rs 8,211 per square foot. 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. The sales of homes priced above Rs 1 crore have grown by 11 per cent on a year-on-year basis, while the lower-priced segment has seen a tight concentration.
This premiumisation shift isn't slowing developers down. Acknowledging the supply, developers have launched nearly 9,975 new units to the housing segment in Q1 2026, indicating their undisturbed confidence in the market's long-term performance. By the April-June quarter, that confidence turned into a full-blown supply rush. Developers launched approximately 16,970 new residential units in Hyderabad during the quarter, representing a 53% year-on-year increase, the strongest supply growth among all major Indian cities. The city recorded a 2% year-on-year increase in residential sales, making it one of the few major markets to post positive annual growth during the quarter.
What's driving this resilience? Employment. The city's commercial real estate market in Q1 2026 hit a historic milestone: office space transactions reached 5.86 million square feet, the highest single-quarter figure ever recorded for Hyderabad and a 48 percent jump from Q1 2025, with Global Capability Centres accounting for 43 percent of that absorption and third-party IT services firms contributing another 29 percent. Average transacted office rents rose 8 percent year on year to Rs 77.5 per square foot per month. Jobs are pulling buyers, and buyers are pulling prices up.
But the boom has a flip side. 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. Industry watchers see this as a deliberate market repositioning rather than a bubble. Commenting on the shifting market dynamics, Mudit Gupta, Head of Anarock Group in Hyderabad, stated, "Currently, the demand is for quality, not quantity." At the same time, 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.
West Hyderabad remains the engine of this growth story. Premium locations in West Hyderabad average between ₹9,500 and ₹14,000 per sq. ft. Micro-markets such as Kokapet, Narsingi, Gachibowli, Kondapur, Puppalguda, Nanakramguda, Financial District, and Tellapur continued to dominate buyer interest. The rental market backs up this appreciation story too, with the rental market very strong, delivering healthy average rental yields of 4.2% to 4.8% across established micro-markets.
Looking at the bigger picture, 2025 laid a strong foundation for this year's momentum. In 2025, the city recorded the sale of 38,403 residential units, marking a 4% growth compared to 2024, and the second half of the year (July to December) alone accounted for 19,355 of these transactions. For homebuyers weighing a purchase in Hyderabad today, the takeaway is straightforward: end-user demand, IT-led job creation, and infrastructure upgrades are keeping this market on solid ground even as other metros pause. Mahindra Lifespaces, with its track record of sustainable, quality-focused developments across India's key metros, continues to track these very corridors that buyers are gravitating towards in 2026.
