- Average housing prices in the city posted a growth of two percent in the latest quarter. West Ahmedabad, which magnetises the NRI segment to its luxury property landscape, is leading the city’s changing real estate fortunes.
- Availability of luxury housing units coupled with good connectivity led Paldi and Ambavadi to record a nine percent and five percent QoQ growth in ‘ask’ rates, respectively.
- Nikol and Vastral, known for offering affordable properties, witnessed huge traction from the industrial workforce and recorded five percent average capital growth, each.
- Good connectivity with SP Ring Road and ample supply of villas and plotted units at affordable prices attracted investors and end-users to Shilaj along the SG Highway, which recorded four percent growth, QoQ.
- Industrial growth and improved social infrastructure led Ahmedabad to register a buoyant rental market with four percent growth, YoY.
- Gota and New CG Road recorded 14 percent rental hike, each. While Gota was preferred for its affordability, New CG Road capitalised on its proximity to the IT Park and Shahibaug.
- Well-developed social infrastructure and the announcement of VasnaGandhinagar Metro project resulted in people preferring to look out for rental properties in Vasna leading to an average nine percent growth in rental ‘asks’ over the last one year.
- Lack of commercial space absorption shifted the tenants’ interest from SG Highway to other areas in the city, resulting in the region posting a rental drop of 14 percent, YoY.
Demand and Supply Analysis
Ahmedabad’s realty landscape was majorly marked by disparities in the demand-supply equation. The city showcased a classic example of a mismatch between buyer’s expectations and developer’s offerings.
- Popularity for residential apartments seemed to have strengthened in Ahmedabad over the quarter. Both demand and supply for this property type surged further and captured more than three quarters of the total market inventory.
- Housing belts in East Ahmedabad and those along the SG Highway recorded the highest rise in supply of residential apartments in Jul-Sep 2016.
- The decline in supply of independent houses/villas was in line with its dipping demand. Restricted budget and preference for gated communities dissuaded buyers from choosing these properties over residential apartments.
- While demand for affordable housing (properties priced within Rs 25 lakh), witnessed a significant hike QoQ, supply failed to match and fell short by nine percent. Almost half of the total share of affordable housing is concentrated in East Ahmedabad.
- Though both demand and supply of mid-income housing (Rs 25-40 lakh) dipped in the current quarter, its availability fell significantly short of its preference, by 10 percent, testifying a disequilibrium in the market dynamics.
- Contrarily, despite limited popularity, supply of luxury (Rs 60 lakh – Rs 1 crore) and ultra-luxury (Rs 1 crore and above) housing witnessed a marginal increase, further widening the gap between demand and supply.
- Despite 2BHK configuration being one of the most preferred in the city, its supply fell in the current quarter. The gap in demand and supply widened further, standing at 11 percent in Jul-Sep 2016, as opposed to nine percent in Apr-Jun 2016.
- Preference for 1BHK configuration picked up by four percent and stood at 15 percent in Jul-Sep 2016. However, its supply failed to meet the city’s appetite and stood at only 12 percent.
- Units configured as 3BHK and 4BHK recorded an oversupply. While the city saw ample demand for 3BHK units, supply of 4BHK units remained way beyond its preference.
- An increase in supply of larger formats illustrates a disparity in developers’ offerings and market demand.
- A surge in supply of new projects priced above Rs 1 crore reflected in the overall inventory of under-construction homes in Ahmedabad. As against 15 percent in Apr-Jun 2016, supply of such properties stood at 20 percent in Jul-Sep 2016. Most of these units fell in the ultra-luxury housing bracket.
- Homebuyers continued to be inclined towards ready-to-move-in units, with close to 95 percent buyers demanding the same over under-construction homes.
- West Ahmedabad and areas around SG Highway witnessed maximum project deliveries in the last six months. Localities such as Satellite, Bodakdev and Vejalpur in the West offered maximum ready-to-move properties on sale.