As the real estate developers in Gujarat prepare for a property show on June 24 and 25, the first after demonetisation, they have estimated an 80 per cent decline in new real-estate project launches, a price rise of about 5 per cent and a shortage of commercial and residential properties. The 12th edition of the annual property show will be inaugurated by Chief Minister Vijay Rupani and Urban Development Minister Venkaiah Naidu.
The show will not exhibit and new real-estate projects. “We will have about 200 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).
Dhruv Patel, GIHED’s honorary secretary said that on an average about 70 per cent of the ongoing projects are already sold when they are showcased at the property show leaving only one-third in the unsold inventory.
Ashish said, “Normally, the property show is held before Navratri, but this year we have decided to organise it early.” The reason for holding the property show early is the provisions of the RERA or the Real Estate (Regulation and Development) Act, which prohibits the marketing of housing projects without registering them with a local regulator.
In Gujarat, though an “interim” regulator for RERA has been appointed, the authority is yet to start registering the projects. “Two months have almost passed since RERA took effect. The government infrastructure is still not in place. We do not even have a website. There are an estimated 75,000 ongoing projects in Gujarat and all of them have to get registered within the next month,” said Shekhar Patel, a leading developer and past-president of GIHED.
According to real-estate developers, even though there has been no rise in the price of real-estate after demonetisation, GST and RERA will raise the prices in the state by five to six per cent.
“In ongoing projects, where only 10-20 per cent of the work has been completed, developers will get input credit, which will be passed on the customers. However, the projects that are nearing completion, the input credit will be lower,” said Shekhar.
Implementation of RERA will also cause a shortfall of new projects. Shekhar added, “Compared to last year, there were will be a 80 per cent decline in launch of new projects. This is largely, because it takes 9-12 months for a developer to get all the necessary approvals and permissions for starting a real-estate project in Gujarat.”
On an average, 40,000 housing units gets completed in Ahmedabad every year. However, with fewer new launches expected this year, developers fear that there will be short-supply of residential units within the next 12 months. Last year, GIHED had cancelled the property show citing a lack of sales.