Ahmedabad metro opens for public
The first phase of the Ahmedabad metro, a 6.5 km-long corridor linking Vastral to Apparel Park, was thrown open to public in March. The foundation stone for the second phase of the metro connecting Gandhinagar to the main city has also been laid. The metro lines will not only enhance connectivity but also pave the way for residential and commercial development along the stretches.
State approves town planning schemes
Out of seven new Town Planning Schemes (TPS) announced by the State at the beginning of the year, five have been sanctioned in Ahmedabad. These include 454 (Hanshpura), 505 (Kathwada), 243 (Ranasan-Muthiya-Chiloda), 416/A (Vastral), and 117 (Kathwada). Clearance of nearly 43 schemes for Ahmedabad in the past 12 months will open approximately 3,000 hectares of land for planned urban development across the city.
Infrastructure development on the cards
The five new flyovers proposed in the State’s budget are set to benefit areas such as Vinobabhavenagar, Vivekanandnagar, Shahibaugh Dafnala and Maninagar Crossing. An inter-modal transport hub at Kalupur and the redevelopment of Vastral Road, Asarva Road, Nikol Road and Maninagar Road would propel housing demand in these pockets.
Civic Body raises budget for development work
With a 15 percent increase in its budget for 2019-20, the Ahmedabad Municipal Corporation emphasised on new development works across the city. The list includes the development of six modal roads viz. Science City Road, Corporate Road, Nikol Road, Vastral Road, Maninagar Road, and Asarva Road. Rejuvenation of rivers and lakes was also included in the agenda along with the development of road projects in West and New West Zones. These measures are likely to escalate housing demand in several regions of the city.
Ahmedabad witnessed a stagnant real estate market in Jan-Mar 2019. Though there was a marginal increase in enquiries, the number of new launches remained restricted. The NBFC crisis along with exorbitant land prices and tiresome project approval procedure cumulatively contributed to the limited number of new launches this quarter. Restricted addition of new units helped the city absorb its available residential inventory, which consequently scaled down from 20,000 in January 2019 to 14,000 at the end of March 2019.
Property prices remained stable except in a few localities which reported modest hikes. Despite all odds, the affinity of homebuyers towards affordable housing projects remained evident. A few areas in East and West Ahmedabad, such as Vaishnodevi, Gota, Chandkheda, Makarba, Bopal, Shilaj, Vastral, Narol and Naroda, emerged as the most popular investment zones.
As buyers attested their fondness for ready-to-move-in units, under-construction properties continued vying for demand. While a reduction in GST rates on under-construction units made prospective buyers curious about the segment, the ambiguity pertaining to exclusion of ITC benefits prevented them from finalising purchase decisions. The city where almost 80 percent of the demand is for properties priced within Rs 60 lakh, a corresponding 60 percent supply has created a major disequilibrium in the housing sector. This leakage needs to be plugged with developers’ efforts towards a “compact-size and right price” strategy.
Property prices in Ahmedabad remained under pressure for yet another quarter, majorly owing to demand-supply mismatch in the different budget categories. Fixing this gap and various planned and ongoing infrastructure projects could spur realty growth in the city in the ensuing quarters.
The average property values in Ahmedabad recorded a marginal growth of one percent during Jan-Mar 2019. Nearly 75 percent of the tracked housing localities clocked a steady growth, with majority being around SG Highway.
Ruling the roost, Naranpura in the West reported a hike of four percent in the average weighted property prices, QoQ. Shahibaug and Chandlodia, too, witnessed an appreciation of four percent each, YoY. Offering competitively priced units, Bopal also clocked a growth of one percent in the quarter ending March 2019. Ample housing stock along with steady infrastructural growth ensured healthy traction in the locality.
The government’s decision to continue with the manual approval of building plans facilitated stuck up realty projects this quarter, too. The overall restricted number of approvals, however, kept a check on the new unit additions this quarter.
Average rentals, too, reported a hike of three percent, YoY. Of all the localities, Sola held the baton of progressive rental charts, recording a nine percent hike in its average rental ‘asks’. Proximity to SG Highway along with the presence of several commercial and residential projects drove rentals in the locality. Vasna and Motera also recorded a growth of nine percent, each, in rental rates, YoY.
Trailing close behind the above localities, Bodakdev and Vejalpur reported an uptick of eight percent, each, in the residential leasing rates, YoY. While the former charmed the masses with its impressive infrastructure, the latter has emerged as a high-potential property market catering to the professionals working in Prahlad Nagar. Presence of a large number of affordable housing options worked well in favour of the locality.
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