The property market of Ahmedabad has witnessed a significant low. The sales volume figure which was recorded was the lowest in the last six years. The reason for the sluggish market of property in Ahmedabad is primarily due to the demonetization policy which was introduced by the Government.
Let us now examine how the real estate in Ahmedabad has performed in the year 2016.
How was the year 2016?
If we see check the figures of the year 2015, we will come to known that the city witnessed a significant recovery in the sales volume which was 13 % Year–On-Year basis and this favorable trend continued in the first half of the year 2016 with an encouraging figure of 10% Year-On-Year basis. But the demonetization policy which resulted in the ban of the currency notes of Rs.500 and Rs.1000. brought the market to a complete standstill. Since the announcement which was made on 8th November several developers have been refraining themselves from announcing any new launches. The buyer segment is also exercising caution at this moment.
However, it is very interesting to note the new projects in Ahmedabad in the premium segment, where the average property rate is Rs. 1.5 crore, was quiet steady and did well at least better than the other segments. This was observed in the second half of the year, 2016. There were several localities like Ambawadi, Bodakdev, Navrangpur, Prahlad Nagar had many new project launches in past six months.
The dip was not only seen the sales figure as this reduction was also seen in the new launches. The quarter 4 of 2016 witnessed merely 1,200 units in new launches which were not even the one-tenth of the figure that was achieved in 2011’s Quarter 1. In 2011 there were around 4,000 units which were under new lunches. The southern part of Ahmedabad has seen a sharp decline in new launches in the second half of 2016 and the builders are still struggling to clear off their unsold inventory.
With more than 80% of unsold inventory the real estate in Ahmedabad, the rates of the properties have fallen drastically. The property is available at average ticket size of Rs.25 lakhs, but even this is not alluring the home buyers. The factors which are making the situation worse are the poor connectivity to the center city, the presence of factories in cities and lack of social infrastructure.