1/7
Real estate in Hyderabad is no longer a 2-3 year flip game.Don’t buy to flip in this market. The flip game is over for most! 2/7
I’m seeing a worrying pattern.
People have been buying second homes, third homes, even plots
largely using heavy leverage.

Home loans.
Top-ups.
Even personal loans.
The assumption?
Prices will go up anyway

Why real estate is super expensive in India and why it will continue to be 🧵

It’s not demand alone or NRIs. Not low interest rates.

The real reason?

India’s land market is the #1 destination for untaxed and surplus capital.

Let’s break it down 👇 1. Land = 30–40% of your flat cost. That is the cut taken by landlords

If you’re buying a ₹2 Cr flat, up to ₹80L value just for the land parcel.

The price of that land is not driven by you and me. It’s driven by illegal capital chasing land.

(1/n)
Home! Biggest discretionary spend in our life time. Upto 40% of home value in big gated societies is emotional in nature. (Read more to understand)

Value of Home = Financial value + Emotional value

Let's use a gated community example. (2/n)

Price of flat, 2200 sft = 3 Cr (Base price + Amenities + Parking + Registration + Cupboards)

Base price: ₹11,000 per square foot * 2200 sft = ₹2,42,00,000
Amenities: ₹10,00,000
Parking: ₹10,00,000
Registration cost: 7.5% of base price = ₹19,65,000
Cupboards: ₹20,00,000
Total: 3.02 Cr ~ 3 Cr

(1/n)
𝐃𝐢𝐝 𝐲𝐨𝐮 𝐤𝐧𝐨𝐰 𝐭𝐡𝐚𝐭 𝟓𝟎% 𝐨𝐟 𝐩𝐥𝐨𝐭 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐦𝐚𝐝𝐞 𝐩𝐚𝐭𝐡𝐞𝐭𝐢𝐜 𝐫𝐞𝐭𝐮𝐫𝐧𝐬 𝐥𝐚𝐬𝐭 𝟐𝟎 𝐲𝐞𝐚𝐫𝐬. 𝐍𝐨 𝐫𝐞𝐚𝐥𝐭𝐨𝐫 𝐰𝐢𝐥𝐥 𝐭𝐞𝐥𝐥 𝐲𝐨𝐮!

Hyderabad city has grown like crazy in all sides.

Plots business boomed from 1980s. (2/n)
This is how plotting projects work. Realtors chose areas with stories. Else they create stories.

They show the progress with good roads and flags.

They purchase land and keep the margins at min 25-50%. After approvals, layout expenses and marketing commissions.

(1/n)
Hyderabad unsold inventory at all-time high. What does it mean to investors?

Hyderabad's unsold inventory is at all time high of 121,296 flats. It is equivalent of four years of sales. (2/n)
But there is a silver lining. The demand in Q1, FY 24 is near record. Record sales happened in Q4 2023 and second best in Q1 2024.

Pace of demand is not decreasing much. Sales are still near record highs even after govt change in Q1 2024.