AHMEDABAD REALTY: ON GROWTH TRACK

One of the top eight metros, Ahmedabad real estate sector is poised for a growth. Construction Times takes a peek into its real estate market.

Ahmedabad, known as the Manchester of India, is one of the biggest property markets in Gujarat. The city, one among the top eight metros, is witnessing a surge in demand for real estate after the Covid pandemic lull.

A recent report by property consultant Knight Frank revealed that home launches in Ahmedabad market jumped by 193% to 4,257 in the third quarter of the current calendar year. These launches had stood at 1,176 in the corresponding third quarter of 2020, the report stated.

Interestingly, Ahmedabad recorded the second highest growth in new launches among the top eight cities in India after Hyderabad, which reported a whopping 650% growth during the quarter, the real estate consultant's report further shows.

Similarly, housing unit sales during the third the quarter under rose 37% to 1,607 units from1,176 units in the same period in 2020. Ahmedabad was among the bottom two cities in terms of sales growth.

According to the report, the overall real estate growth across the country was large driven by affordable housing with sales of units priced below Rs 50 lakh witnessed a significant surge. Surprisingly, despite the significant growth in sales as well as launches, property prices remained flatted in Ahmedabad.

Interestingly, despite the rise in number of launches as well as a significant growth in sales during the third quarter, property prices in Ahmedabad witnessed a muted growth. However, the growth was significant as compared to the price rise witnessed in other metros.

A recent report by property portal PropTiger revealed no decline was witnessed in the average rates of new apartments and villa-based projects across the markets covered in the analysis and prices did move upwards in the past one year, the increase in values was also largely marginal. Ahmedabad, where the upwards swing was most prominent, saw average values of properties going up by 8% in Q3 when compared to the same period last year.

Experts believe that the property prices here are expected to witness a 30 per cent surge in the next few months.

The report also highlighted that the inventory overhang in Ahmedabad market has also reduced to 42 months. As on September 2021, the unsold inventory in Ahmedabad was 51208 units.

“It is now a well-established fact that the notion of property ownership has gained significant currency in the aftermath of Covid and its impact on the way people live and work. Even as this has helped build positive consumer sentiment vis-à-vis residential real estate, support measures by the government and the banking sector have set the ball rolling for a positive change in momentum for the sector. In combination, these two factors have helped drive both, demand and supply, metrics upward during the July-September quarter of 2021,” says Dhruv Agarawala, Group CEO, Housing.com, Makaan.com and PropTiger.com.

According to GIHED, most of the developers will increase the prices in a staggered manner as the market has slowed down due to the Covid-19 pandemic. “Any sudden rise in prices will shoo away the buyers from the market, where the demand is already less. But eventually, the prices will increase as the rise in prices of construction materials like cement and steel have thinned our margins,” he added.

“Real estate market is currently very positive with the threat of the third wave fading and vaccination drive going very strong. This has further helped in improving the market sentiment,” he added.

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