The real estate market in Ahmedabad has virtually screeched to a halt with the city recording the biggest decline in number of new housing units being launched between January to June period. A real estate report that was released on Wednesday blamed it on the lack of clarity regarding the newly legislated Real Estate (Regulation and Development) Act or RERA. “The National Capital Region (NCR) of Delhi and Ahmedabad are two residential markets that have seen the biggest drop in launch of new projects. Compared to 8,809 housing units launched between January to June last year, there were only 1,874 unit launched this year. This is 79 per cent decline. The real estate market in Ahmedabad has come to a complete standstill,” said Balbirsingh Khalsa, National Director-Industrial, Knight Frank, a global real-estate consultancy firm that released the “India Real Estate — Residential and Office – January-June 2017” report in the city.
If all the eight major residential markets in India are taken into consideration, launch of new housing projects crashed 41 per cent which is the lowest in seven years. Chennai was the only market that recorded a marginal four per cent year-on-year rise in launches of homes. In Ahmedabad, the decline looks more stark when the comparison is made with January to June 2014 when over 9000 housing units were launched during a six month period. The interim head for RERA in Gujarat was appointed on June 1, 2017. “However, it will take another six months for new project launches to pick up as the required RERA infrastructure is not yet in place,” Khalsa told mediapersons.
This was also evident in the annual real-estate property show held by the developers in Gujarat where there were no new projects on display. All the 200 projects made available for customers at the GIHED property show were under-construction projects. Moreover, developers in Gujarat have not started registering their projects under the RERA. According to local developers, there are over 75,000 ongoing real-estate projects in Gujarat that awaiting RERA registrations.
Of the 1,874 new housing units launched this year in Ahmedabad, 57 per cent were launched in the affordable segment that were priced at Rs 25 lakh or less, the Knight Frank report stated. The lion’s share of the new launches in the last six months has happened in North Ahmedabad which has locations such as Chandkheda, Gota, Motera and Ognaj. East Ahmedabad with locations like Naroda also accounted for 41 per cent of the new launches.
The lack of new housing projects has reduced the unsold inventory in Ahmedabad to 32,934 units (both under construction and completed houses), compared to an inventory of 46,461 units that existed in 2013. The highest number of unsold homes are in North (10,158 units) and the posh-West Ahmedabad (9,756 units). Sales of homes have been affected marginally — dropping 7 per cent from 8,556 housing units in January-June 2016 to 7,941 units this year.