Housing prices in Hyderabad have increased by 26 per cent since 2013 despite weak investor sentiments and agitation for Telangana, according to property consultant ANAROCK.

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"Hyderabad, a densely populated city and a major IT/ITeS hub, is fast transforming into a mega-city with high liveability index. Furthermore, the city enjoys the benefit of a circular development due to the outer ring road which helps in multi-directional growth," ANAROCK Chairman Anuj Puri said in the city report.

Post state bifurcation in 2014, he said the political stability has given Hyderabad an upper edge as the government's key focus is on infrastructure development.

"Factors like an online clearance system for new projects approval, large-scale support from the state government for young entrepreneurs, low cost of living, good quality of life, abundant land availability, large talent pool and decent infrastructure make Hyderabad one of the most sought-after cities in the country," he added.

According to the report, the growth in capital values of residential properties remained positive over the last six years despite weak investor sentiments, political instability and Telangana state agitation.

"Hyderabad residential real estate experienced a linear growth in its average prices since Q4 2012, registering a 5 per cent CAGR during 2012-17. Hyderabad's residential market witnessed a capital value growth of 26 per cent from Q4 2012 to Q1 2018," it added.

On housing demand, the consultant said that housing sales rose by 21 per cent in 2017 as against the previous year due to positive market sentiments coupled with growing IT work force, mainly in the western zone.

The unsold inventory in the city has been declining gradually since 2017. In fact, the city scores far better than many other metro's in terms of unsold stock pile-up situation.

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"The total unsold stock in Hyderabad in Q2 2016 stood at 35,560 units, which reduced by nearly 14 per cent in the corresponding quarter in 2017. The unsold stock further reduced by 13 per cent in Q2 2018 as against the same period in 2017. In a span of two years, the total unsold stock in Hyderabad reduced by nearly 29 per cent," the report said.

The consultant said that political instability, Telangana state agitation and general elections, had affected housing sales in Hyderabad during 2013-14 period.

However, post-2016, there is a clear surge in demand and absorption has accelerated in major residential pockets of Hyderabad as the city showed clear signs of revival by attracting large investments and transforming the physical infrastructure situation.