Ahmedabad Real Estate Market Recovering, Home Sales Increased 10%
After having remained sluggish due to the implementation of the Real Estate (Regulation and Development) Act (RERA), Goods and Services Tax (GST) and demonetization, Ahmedabad real estate market recovering with an upward trend in sales of residential units.
Sales of homes in Ahmedabad increased by 10%, to 26,489 units in 2017-18, against 24,031 units in 2016-17, says a report by Liases Foras, a real estate rating and research company.
There is always a natural rise in demand with a steady increase of 1.5% to 2% in migration to the city. However, the realty market was hit first by demonetization, then RERA and GST. As the dust around these developments has now settled, consumers started buying properties again. This has pushed up sales of residential units, said the chairman of the Gujarat chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
Consumers were expecting a cut in prices due to the wake of overall sluggishness in the market. However, prices have remained stable without moving up or declining steeply. Customers now think this is the best time and price to buy a house. Hence, there is an uptick in sales. Prices in Ahmedabad real estate market declined marginally, by 1%, the report adds.
Real estate players say sales gained traction in last two quarters of fiscal 2017-18. The recovery was quite visible in last quarter with sales picking up. Prospective consumers, who were in wait-and-watch-mode for some time, have started buying homes. This has pushed up sales, said the president of Gujarat Institute Of HSG & Estate Developers (GIHED)-CREDAI.
The affordable housing segment has gained the most traction, as 2,493 units costing less than Rs 25 lakh and 2,469 units in the range of Rs 25 lakh to Rs 50 lakh were sold in the fourth quarter of fiscal 2018. These units accounted for 73% of the total 6,776 units sold in Q4 of FY18.
However, launches of new residential units in the city plummeted by 43% to 10,515 units in FY18 from 18,507 units in FY17. Market players say developers are grappling with compliance to the new realty law, RERA, which came into force last May. The time taken for launching a new housing scheme has increased substantially after RERA. Hence, new launches have taken a major hit, said another city-based developer.
This reduction in new supply and increase in demand has brought down unsold inventory with developers. Unsold inventory in Ahmedabad came down by 9%, to 68,033 units in Q4 FY18 from 75,096 units in Q4 FY17.
Source Link- https://timesofindia.indiatimes.com/