The real estate market in Ahmedabad took a beating in the October-December period as a slump in sales of residential units on account of demonetisation resulted in an estimated revenue loss of Rs 500 crore to developers. The most recent report by global consultancy firm Knight Frank states that city’s residential market saw sales and new launches drop by 43% and 69% respectively throughout the fourth quarter of 2016.
As per the report, 2,800 residential units were sold in Ahmedabad in Q4 2016 as against 4,900 units throughout the corresponding period in 2015. Similarly, new projects in ahmedabad also plummeted to just 1,200 units from 3,890.
“India’s property mar ket suffered a revenue loss of Rs 20,000 crore after demonetisation. The figure for Ahmedabad is Rs 500 crore,.The units ‘sales of residential property in Ahmedabad market would have reached 5,000-6,000 units in Q4 if there had been no demonetisation drive.
“I’m uncertain about the amount of losses but demonetisation has certainly had an adverse effect on realtors’revenues,“ said Dipak Patel, president, GIHED-CREDAI. October was the only real solace in Q4 2016 when the sales volume witnessed some positive traction as a result of start of the festive season. Demonetisation brought the market to an entire standstill in Q4. Developers in Ahmedabad refrained from an nouncing any new launches and buyers turned extremely cautious before committing on purchases.The year 2016 could have been marginally better than 2015 had there been no demonetisation move, because the sales numbers for the initial nine months were showing an optimistic trendbranch director Ahmedaba.
Now, demand revival is extremely critical for property sector. Lowering of interest rates, already corrected prices, likely incentives in the typical budget and improvement in income levels are anticipated to revive demand.