GST fall-out: Gujarat developers deal with 80 per cent dip in new real-estate launches, 5 per cent rise in new homes

The 12th edition of the annual property show will be inaugurated by Union urban development minister Venkaiah Naidu and Gujarat chief minister Vijay Rupani.

By: Express News Service | Ahmedabad | Updated: June 22, 2017 8:42 pm
IT industry, residential realty, real estate, real estate it industry, it industry jobs, business news, indian express news According to real-estate developers like Shekhar, there has been no rise in the price of real-estate after demonetisation.

An estimated 80 decline in new real-estate project launches, price rise of about five percent and a possible shortage of commercial and residential properties are some of the issues that real-estate developers in Gujarat are trying to grapple with, as they get together for the first time after demonetisation to launch a property show on June 24-25, 2017.

The 12th edition of the annual property show will be inaugurated by Union urban development minister Venkaiah Naidu and Gujarat chief minister Vijay Rupani. However, the show will not exhibit any new real-estate projects. “We will have about 200 projects and all of them will be ongoing projects,” said Ashish Patel, president of GIHED (Gujarat Institute of Housing and Estate Developers), the City arm of pan-India body CREDAI (Confederation of Real Estate Developers Association of India).

In 2017, GIHED had cancelled the property show citing lack of sales. “Normally, the property show is held before Navratri (beginning of the festive season). But this year we have decided to organise it early,” Patel added. One of the reasons for holding the property show early are the provisions of RERA which prohibits the marketing of housing projects without registering them with local regulator.

According to GIHED’s honorary secretary Dhruv Patel, on an average about 70 percent of the ongoing projects that will be showcased at the property show have already been sold, leaving only one-third unsold inventory.

In Gujarat, though an “interim” regulator for RERA has been appointed, the authority has not yet started registering projects. “Two months have almost passed since RERA took effect. The government infrastructure is not yet in place for RERA. We do not even have a website. There are an estimated 75000 ongoing real-estate projects in Gujarat and all of them have to get registered within the next one month,” said Shekhar Patel, a leading developer and past-president of GIHED.

According to real-estate developers like Shekhar, there has been no rise in the price of real-estate after demonetisation. However, the implementation of RERA and GST will push the real-estate prices northwards by five-six percent in Gujarat. “In ongoing projects, where only 10-20 percent of the work has been completed, developers will get input credit, which will be passed to the customers. However, the projects that are nearing completion, the input credit will be lower,” he added.

Due to the implementation of the RERA, this year there will a huge shortfall of new projects. “Compared to last year, there were will an 80 percent decline in the launch of new projects. This is large because it takes 9-12 months for a developer to get all the necessary approvals and permits for starting a real-estate project in Gujarat,” Shekhar added.

Every year on an average, 40,000 housing units get completed in Ahmedabad. However, with fewer new launches expected this year, developers fear that there will be short-supply of residential units within the next 12 months.

 

Apart from inaugurating the GIHED property show in Ahmedabad, Union urban development minister Venkaiah Naidu on Saturday will be launching a host of services offered by the Ahmedabad Municipal Corporation including a “common mobility payment card” christened Janmitra. The minister at the GIHED event will also launch an AMC Seva application, an airport shuttle service, a command and control centre of the integrated transport management system and a four-megawatt wind mill project.

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