HYDERABAD: Hyderabad's construction sector has slowed sharply over the past two years, reflecting a broader national trend. The downturn has now spread from large corporate projects to middle-class and individual housing segments.
Industry data showed that new project completions in the city dropped to 0.6 million sq ft in the January-March quarter of 2026, compared with 6 million sq ft in the previous quarter. Revenue linked to building permits issued by the Greater Hyderabad Municipal Corporation (GHMC) also fell, indicating a wider slowdown in activity.
Fewer large-group launches contributed to the decline. Demand for middle-class and individual housing also weakened sharply, reducing the number of new housing projects.
Builders and contractors involved in independent houses and small apartment blocks said rising input costs and tighter financing conditions weakened activity. Lower demand from salaried middle-class buyers and self-build households also reduced new housing starts.
A report by property consultancy firm Vestian stated that new project completions across India fell 36 per cent quarter-on-quarter to 9.7 million sq ft in the first quarter of 2026. In Hyderabad, developers have become cautious and delayed both launches and execution, although office leasing remained comparatively stable.
Middle-Income Housing Segment Hit Hard
Builder and architect K. Srinivasa Rao told to a Journalist that the middle-class housing segment suffered the biggest setback. The segment traditionally drives small apartment projects, plotted developments and independent house construction.
"In recent years, builders shifted towards premium projects, leaving fewer affordable options for salaried buyers and self-build households," he said.
He added that rising property prices and higher borrowing costs made it difficult for middle-income families to buy homes. As a result, construction activity slowed in smaller neighbourhood projects and independent housing developments, especially in growth corridors and peripheral areas.
Rao said his projects declined by 40 per cent during the last financial year. He also blamed rising construction costs and union-led price hikes for worsening the slowdown.
According to Rao, the Rig Owners Association recently announced a unilateral 60 per cent increase in borewell drilling charges. The rate for drilling up to the first 100 feet rose from ₹50 per foot to ₹80 per foot for 6.5-inch borewells.
The revised rates included ₹100 per foot for drilling between 101 and 200 feet, ₹130 per foot between 201 and 300 feet, and ₹170 per foot between 301 and 400 feet.
"This steep jump has dampened my spirit to dig a borewell before constructing a new house in place of an old building," said Shyam Sunder, a resident of Bachupally, an area known for poor underground water levels.
Labour Strike Adds to Construction Woes
A strike launched by the Twin Cities Centering Workers Union on May 16 also disrupted construction activity. Independent house projects and smaller apartment works reportedly came to a standstill.
The union has demanded an increase in centering charges from ₹30-35 per sq ft to ₹50 per sq ft, marking a rise of around 60 per cent.
Shuttering contractor M. Eshwar said contractors already faced labour shortages in centering work. He claimed workers earned ₹1,200 per day, while masons received daily wages of ₹1,300.
Rao also alleged that unqualified people entering the construction business distorted the market and affected building standards.
"Many masons with no technical knowledge have become builders. They do not maintain standards, leading either to higher project costs or poor building quality," he said.
He urged the government to stop unqualified persons from undertaking house construction. He also recommended mandatory training programmes for masons and workers at the National Academy of Construction in Hyderabad to improve standards and address skill shortages.