Dismal show of realty sector in Ahmedabad, new residential launches hit a new low in H1 2017

Ahmedabad: In a dismal show during the first half of 2017 (January to June) the realty sector in Ahmedabad, the commercial capital of Gujarat and seventh largest city in India, saw a launch of only 1,874 new housing units in the market which in comparison to H1 and H2 2016, were down by 79% and 64% respectively.

According to the Half yearly report- India Real Estate of Knight Frank, the leading independent global property consultancy headquartered in London, issued today the pan India scenario was also bleak with an average 41% downturn in residential sector.

As per the report despite considerably lowering in new residential launches in Ahmedabad, sales picked up in H1 2017 from H2 2016, though it is still lower than H1 2016. This was possible due to availability of ready-to-move-in homes as developers rushed to complete unfinished projects before RERA came into force from 1 May 2017

A significant chunk of new launches took place in the sub Rs. 25 lakh range, given the government’s focus on the affordable housing sector. Affordable markets in East and North Ahmedabad collectively contribute to 91% of the launches; Chandkheda, Gota, Motera and Ognaj in north and Naroda and locations along the Naroda- Dehgam Road in east saw majority of the new launches. Sales activity moved up in West Ahmedabad courtesy proximity to industrial clusters.

Speaking about the findings, Balbirsingh Khalsa, Director – Ahmedabad, Knight Frank said, “The decline in new launches in Ahmedabad can be attributed to lack of clarity, especially on RERA, which has been the single most important factor that has held back developers from launching new projects. We expect launches to pick up once there is clarity on RERA and systems are put in place for its implementation. However, despite this ambiguity, developers have responded in a positive manner to the government’s initiatives towards affordable housing. This is evident from the fact that of the total units launched in H1 2017, 57% were in the sub Rs. 25 lakh price category. On the sales front, home buyers are showing their affinity towards affordable housing projects. Also the unsold inventory is less than two years old which just about manages to keep pace with the average speed of construction in the city.”

On the pan India level also the reports put a bleak picture with lowest first-half sales and launches in the last 5 year.
It says, ” Launches crash 41%, lowest in seven years. Sales volume down by 11% YOY, lowest first-half sales in the past 5 years. The residential market had barely come out of the demonetization shock when the need for RERA compliance put breaks on a large section of new projects. Barring Chennai new projects dried up in eight major cities. NCR and Ahmedabad were worst hit with launches plummeting by 73% and 79% respectively. Sequentially,Mumbai picks by close to 62%, albeit lower by 36% YOY. Chennai was the only market to record a marginal 4% YOY rise in launches
growth at 14% and 8% YOY respectively