Ahmedabad bets big on upcoming realty projects
Nearly 100 new commercial and residential projects in Ahmedabad are gearing for a launch in the festive quarter of Oct-Dec 2018. The upcoming real estate supply is expected to restore the momentum in the sector and reduce the demand-supply disparity in the city.
Planned metro routes to boost housing demand
The construction work on the Ashram Road-Apparel Park Metro link and the East-West Ahmedabad Metro rail is likely to begin soon. Improved connectivity is expected to boost housing demand in the residential belts along the two stretches in the subsequent quarters.
State registers 3,300 realty projects under RERA
With 3,300 projects and 620 property agents, Gujarat followed Maharashtra and Uttar Pradesh and ranked third amongst the States with maximum RERA-registered projects, both new and ongoing. Ahmedabad has almost 1,400 RERA-registered projects. Timely establishment of the RERA authority aided faster compliance to the law.
Government secures land for Bullet Train Project
By raising the compensation for the farmers who agreed to relinquish land for the Bullet Train Project, the Gujarat government ensured a speedy implementation of the ambitious project. The Bullet Train project is an elevated 508 km high-speed rail network between Mumbai and Ahmedabad.
Online technology software slows building approval process
Teething troubles with the newly introduced Online Development Permission System (ODPS) dropped the monthly average of approved building plans from 215 to 20, instilling a fear of penalty under RERA amongst the developer community.
Gradually improving property enquiries and sales volume set Ahmedabad’s realty market on a road to recovery. The impasse created by the implementation of RERA and GST seems to have dissipated now. Average property prices in the city climbed north in Jul-Sep 2018, although marginally, testifying the buoyed buyer sentiment and housing demand. Affordable homes priced within Rs 25 lakh garnered maximum buyer traction and reported a sale of nearly 30,000 units this quarter. New launches remained meek and a resurgence is unlikely even in the upcoming festive months. Taking an account of the few launches that happened this quarter, the inventory levels in Ahmedabad stood at around 17,500 units.
The new online building plan approval mechanism, which hampered speedy approval of projects, also hit new launches and hence, new housing supply in the city.
Select markets in the East and West, replete with fresh inventory, improved infrastructure and affordable housing stock, such as Nikol, Chandlodia, Gota, and Naranpura were the most popular amongst homebuyers. The premium inventory, however, continued to struggle for buyers.
The overall resurrection of the market largely depends on the long-term benefits of structural reforms. Moreover, many other relaxations are sought from the government to expedite the implementation of ‘Affordable Housing’ such as a further cut in GST, higher Floor Space Index (FSI) and a single-window clearance that still remains a pressing concern for the builder fraternity in the city.
In line with the previous quarter, housing market of Ahmedabad continued to gain steam in Jul-Sep 2018. While supply remained restricted to only 800 housing units, demand reported a marginal uptick this quarter. Initiatives pertaining to RERA, Pradhan Mantri Awas Yojana (PMAY) and infrastructure enhancements coupled with a few launches in the commercial segment cumulatively promise a brighter future.
The average property values in Ahmedabad recorded a marginal one percent growth in Jul-Sep 2018. Approximately, 75 percent of the tracked housing localities in the city clocked steady growth.
Although demand recuperated, fresh inventory supply suffered at the hands of a new approval process. Instead of expediting the building plan scrutiny process, the new Online Development Permission System (ODPS) further slowed it down. Against an average of 215 building approvals processed per month, the number dropped to 20.
Localities in the East and around the SG Highway witnessed maximum buyer traction. Nikol in the East emerged as the bellwether with four percent hike in the average capital values, QoQ. Affordability, newly developed units and self-sufficiency catalysed locality’s growth. Capital values at Nikol hover around Rs 2,400 per sq ft.
Following suit, Maninagar clocked a three percent spike in the average capital ‘asks’. One of the oldest locales in the East, Maninagar enjoys robust housing demand due to strong rail connectivity and proximity to Vadodara-Ahmedabad highway. Other micro-markets that topped the property chart include Shela, Chandlodia and Naranpura, each registering a three percent growth over the last two quarters.
Rental market reported a three percent increase in the average values, YoY. Vasna and Motera emerged as the frontrunners for the second quarter in a row, each recording a nine percent appreciation in the average annual rentals. Easy accessibility to the ring road, comparatively affordable monthly rentals, proximity to Sanand industrial hub and IIT have propelled the popularity of these locales among the tenant community. While a 2BHK unit in Vasna is available on rent for Rs 12,000 per month, in Motera, a similar home is available within Rs 10,000 per month.
Vejalpur, Bodakdev and Ambawadi also recorded a growth of eight percent each in their average rental prices in Jul-Sep 2018 vs. Jul-Sep 2017.
The affordable (Within Rs 25 lakh) and mid-income (Rs 25-40 lakh) residential units continued to be the most sought-after budget brackets. Inventory priced beyond Rs 60 lakh failed to sustain homebuyers’ interest.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.