Hyderabad Real Estate: Home Sales Fall, Property Prices Remain Strong

Hyderabad’s residential property market is showing mixed signals in 2026. While home sales have weakened and buyers are becoming more selective, property prices continue to remain relatively strong. At the same time, rising construction material costs are putting additional pressure on developers and their profit margins.

Construction expenses in Hyderabad are estimated to have increased by around 8% to 10%, mainly because of higher prices of steel, cement, bitumen, finishing materials and other key inputs. Depending on the size, height and complexity of a project, the increase could add around ₹150 to ₹300 per sq ft to construction costs.

Rising Steel and Cement Prices Add to Construction Costs

Steel has emerged as one of the biggest contributors to the increase in construction expenditure. According to K Sreedhar Reddy, president of NAREDCO Telangana, steel represents around 12% to 15% of hard construction costs.

A rise of 10% to 15% in steel prices can increase the overall construction expenditure by approximately 1.5% to 3%. The impact is generally more pronounced in high-rise developments because such projects require stronger structural systems, deeper foundations, basements and shear walls.

In Hyderabad, TMT steel prices are currently estimated at around ₹60,000 to ₹72,000 per metric tonne, compared with approximately ₹52,000 to ₹63,000 during the first half of 2025.

Cement prices have also moved higher, with a 50-kg bag now costing about ₹320 to ₹470, compared with ₹290 to ₹420 earlier.

Other construction materials have also become more expensive. River sand prices have increased to around ₹55-95 per cubic foot, while crushed stone aggregates have risen by 4% to 7%.

Bitumen has recorded an even sharper increase, with prices estimated at ₹42,000 to ₹52,000 per tonne, representing a rise of around 12% to 18%.

Finishing Materials Become More Expensive

The cost escalation is not limited to structural materials. Prices of tiles and sanitaryware have increased by around 10% to 20%, while certain specialised finishing products have become as much as 60% more expensive.

These increases are particularly significant during the finishing phase of residential projects.

Higher fuel expenses, transportation charges, global freight costs, manufacturing expenses and supply-related challenges are among the factors contributing to the increase in material prices.

Construction companies are also dealing with higher costs for energy-intensive materials such as steel and cement.

High-Rise Projects Face Greater Cost Impact

Structural components form a substantial part of overall construction expenditure. RCC frameworks alone account for roughly 40% to 45% of direct building costs, while steel makes up another significant portion.

The recent increase in steel prices could add approximately ₹30 to ₹50 per sq ft to construction costs. For large residential communities and high-rise developments, this can translate into a considerable increase in the total project budget.

For instance, a 1 lakh sq ft high-rise project could require approximately 450 to 550 metric tonnes of TMT steel. Even relatively small changes in steel prices can therefore increase the project's expenditure by several tens of lakhs of rupees.

Developers Absorb Higher Costs

Despite the increase in construction expenses, developers have largely avoided immediately transferring the additional burden to existing homebuyers.

For projects that are already under construction and homes that have already been booked, developers are reportedly relying on contingency budgets, procurement strategies and supplier negotiations to manage the additional expenditure.

However, if elevated material prices continue for a longer period, new projects and unsold inventory could see a 1% to 3% price adjustment.

Smaller builders and contractors are likely to face greater pressure because they generally have less negotiating power and depend more heavily on local suppliers and spot-market purchases. Larger developers, meanwhile, can benefit from bulk procurement and forward contracts.

Hyderabad Home Registrations Decline

The rising construction costs come at a time when Hyderabad's housing market is experiencing softer sales.

Residential registrations in Hyderabad declined 9% year-on-year and 4% month-on-month in August 2026. Around 5,937 homes were registered during the month, with the total value of registered properties reaching approximately ₹4,576 crore.

Although the value declined 2% year-on-year, it increased 3% compared with July.

The longer-term numbers remain comparatively positive. Between January and August 2026, Hyderabad recorded 50,095 residential registrations worth ₹35,423 crore.

Premium Housing Continues to Support Market Value

The premium housing segment continues to play an important role in Hyderabad's property market.

Registrations of homes priced above ₹1 crore fell 8% year-on-year to 1,299 units in August. However, the value of transactions in this category increased 2% to around ₹2,449 crore.

Properties priced above ₹1 crore represented about 22% of registrations but contributed nearly 54% of the total transaction value.

Meanwhile, homes priced below ₹50 lakh accounted for around 52% of registrations, while properties in the ₹50 lakh to ₹1 crore range represented approximately 26%.

Property Prices Remain Firm

Despite the decline in transaction volumes, Hyderabad has not witnessed a broad-based fall in residential prices.

The weighted average transaction price increased 8% year-on-year to ₹4,964 per sq ft in August.

Rangareddy recorded an 11% increase, taking the average price to approximately ₹5,793 per sq ft. Prices in Medchal-Malkajgiri and Sangareddy increased by around 7% and 10%, respectively.

The figures indicate that buyers may be purchasing fewer homes but are still spending significantly on higher-value properties.

Home Sales Fall in First Half of 2026

The broader housing market also reflects a slowdown in volumes.

Greater Hyderabad recorded around 26,068 home sales during the first half of 2026, representing a 13% decline compared with H1 2025. It was reportedly the weakest half-year performance since 2022.

However, the average ticket size moved in the opposite direction. It increased by around 10%, from ₹1.85 crore to ₹2.03 crore.

The total value of homes sold during the first six months of the year stood at approximately ₹52,913 crore.

Housing Supply Rises Despite Slower Sales

New housing launches have increased considerably even as sales have slowed.

Developers launched around 49,656 homes in H1 2026, compared with 36,224 units during the same period last year. This represents a 37% increase in new supply.

With launches significantly exceeding sales, unsold housing stock increased 21% year-on-year to approximately 1,42,722 units. The current inventory represents an estimated 29-month supply overhang.

However, the inventory numbers do not necessarily indicate an immediate oversupply crisis.

Only around 20% of the unsold homes, or nearly 30,000 units, are either ready for occupation or expected to be completed during 2026. Approximately 59,400 units are expected to be completed in 2027-28, while another 53,800 units are projected for 2029 or later.

Next 6-12 Months Crucial for Hyderabad Realty

Developers are now attempting to balance rising input costs with the need to maintain sales momentum. Procurement planning, supplier negotiations and contingency reserves are becoming increasingly important for project management.

If steel and bitumen prices remain elevated, developers could consider modest price increases for new launches and uncommitted inventory. Existing booked properties are generally expected to remain protected from immediate cost revisions.

Over the next six to 12 months, steel prices could move within a 3% to 5% range, while cement prices may increase by around 4% to 6% during periods of strong construction activity.

For Hyderabad's real estate sector, the key challenge will be managing rising construction expenses while maintaining buyer demand. Although sales volumes have weakened, firm property prices and continued interest in premium housing suggest that the market is undergoing a period of adjustment rather than a widespread price correction.

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