Ahmedabad real estate market has been witnessing slow sales growth for quite some time. The real estate sales volume that has been falling since the last four years is unlikely to see growth immediately. The current real estate trends are rigid as the market dynamics are changing fast. Post demonetization, the homebuyers have become even more cautious while investing in the Ahmedabad’s real estate market.
Revival of Market Sentiment
Although the real estate sales in Ahmedabad had picked up in the first half of 2016 because of improvement in business sentiment and the revival in the manufacturing sector, however, there has been no clarity on the stability of the market. The homebuyers and investors are maintaining a wait and watch approach currently. Moreover, the property prices have been stagnant in the city for a long time. Real estate in Ahmedabad did not witness major price appreciation as well. Further, the sluggishness is also reflected in the property registration, as there has been 63 per cent fall in Ahmedabad property market.
However, the micro market sales have witnessed considerable changes in the first half of the year 2016 after a consistent slowdown. The share of sales in East and North Ahmedabad have increased marginally, and the share of the rest of the micro-markets have reduced slightly. The areas such as Gota, New Ranip, Tragad, Chandkheda, Motera, Naroda, Vastral, Nikol, Kathwada Road, and Odha including others have witnessed potential sales in the residential property. In fact, the homebuyers prefer the North and East zones because the property prices are affordable and are in great demand among mid-segment homebuyers. The maximum number of new launches are taking place here. The social infrastructure is quite robust and convenient in the northern part. However, the eastern zone is a reasonably priced destination comparable to North Ahmedabad. The property prices in the northern zone are within Rs 2,200-3,700 per sqft and the eastern zone is between Rs 1,800-2,500 per sq ft.
Central Ahmedabad’s share has been holding steady over the last 12 months due to better connectivity and office spaces. It has attracted homebuyers substantially despite high prices. The property price in the central region is between Rs 5,500-7,500 per sq ft. The locations such as Ambawadi, Navrangpura, Shahibaug and Nehru Nagar are few places preferred by high net worth individuals due to well-developed social infrastructure and commercial spaces. Many foreign investors have held their decision due to stagnant market price and lack of price deceleration. These investors may start investing in Ahmedabad’s real estate market, as there is an expectation that the property prices in the secondary market will fall down over the next one year due to demonetisation. If prices fall, it will be beneficial for the premium and luxury segment. Therefore, it will be best for NRIs to invest in Central Zone in Ahmedabad.
Like Central zone, the western zone also has easy access to the major retail centres and has a good social infrastructure. The areas such as S. G. Highway, Ambll, Bodakdev, Jodhpur, Prahlad Nagar, Satellite, Bopal, Thaltej, and Science City Road have good connectivity. The price range is the west Ahmedabad is within Rs 5,000-7,000 per sq ft. There are many premium properties available in the region. Along the Sarkhej-Gandhinagar Highway, there are many industries and commercial spaces located that are attracting the homebuyers and investors. The High Court of Gujarat is also located here. Many colleges, schools and universities are located here. The Highway also connects to the other parts of the city with ease. Public transportation is good in Ahmedabad as buses run by the Ahmedabad Municipal Transport Services (AMTS) cover almost all areas and the charges are nominal.
However, South Ahmedabad is facing great challenges due to poor connectivity to the city centre and lack of social infrastructure. The builders are developing new projects in areas such as Vinzol, Hathijan, Vatva and Narol. In fact, the southern zone has high unsold inventory available. South Ahmedabad may take almost a decade to develop substantially.