Good times ahead for those who bought luxury apartments in Ahmedabad as the capital value of such properties have appreciated nearly ten percent over the past few months. The reason ironically is that builders in Ahmedabad are more concerned with creating mid-level and affordable flats in Ahmedabad and this has made luxury apartments in Ahmedabad dearer as demand for luxury homes has remained unchanged from a few years ago.
Even as the price of homes in the NCR has fallen by close to five percent the price for such homes in Ahmedabad has risen. While the price of luxury flats in Ahmedabad is far lower than the price of homes in the same category in Gurgaon or Mumbai, the quality of many luxury homes in Ahmedabad is comparable to that of homes in the larger metros of the country. Thus while such homes in Ahmedabad may not command as high market value as homes in the MMR, they are befitting homes for end use and are largely bought for such purposes and not necessarily for investors keen to purchase an asset that may appreciate.
The difference between the number of luxury flats in Ahmedabad which were constructed in 2014 and the number built this year is more than one thousand. While approximately 1,200 luxury units were built in 2014 only a little more than two hundred were have been erected this year while the demand for luxury homes in Ahmedabad has remained unchanged over the past few years. The demand for luxury homes in Ahmedabad has remained stable at between 500 and 550 units per year; hence the price of luxury homes has risen considerably in Ahmedabad. While the number of projects in Ahmedabad catering to luxury home buyers has dropped, demand for budget homes has increased and this has led to builders channeling their resources and efforts to create more property in Ahmedabad for middle-income households.
It is expected that the GDP of India is likely to post higher growth than it did last year and the wealth creation of this bounty is expected to lead to greater demand for even more luxury property in Ahmedabad as well as in many other realty markets across the country. In Ahmedabad, unlike in larger metro cities, a home which costs one crore or above is considered to be a luxury home. In Gurgaon there is virtually no good property which can be purchased for one crore, to own a luxury home in Gurgaon one must have a corpus of at least two crores set aside. Much of the demand for Real estate projects in Ahmedabad springs among parts of the city located close to the center, regions such as Satellite and Prahlad Nagar are sought after destinations for luxury homes in Ahmedabad.
If the ambitious plans by the government come to fruition and Ahmedabad is connected via a bullet train with Mumbai, we may expect the valuations of Ahmedabad property to multiply several folds. If Ahmedabad goes on to become a short commute from a city such as Mumbai it will be feasible for residents of Ahmedabad to live in one city and work in the other making property in Ahmedabad highly attractive to buyers from all segments while leading to a further increase in the capital value of existing apartments in Ahmedabad.