Experts says that drying up of inventory will lead to more launches in the city the future
The unsold inventory of fresh housing unit in Ahmedabad has dipped to 10,049 in first half of the year 2019, half of what is used to be in previous years, said a report of consultancy firm Knight Frank. Experts said that drying up of inventory will lead to more launches in the city the future.
According to the report, the city had an inventory of 20,120 units about a year ago, which dropped to 14,863 at the end of December 18 and it has now further dropped. Sales of housing units stood at 8,212 during the quarter compared to 8,087 in the H-1 of 2018, indicating a rise of only 1.5 per cent. The year 2018 witnessed 16,188 sales.
"Stagnancy in sales is because now investors are not interested in the market. Only those who need them are coming to buy. There is an impact of overall slowdown as well. Now close to 16,000 units are sold compared to the peak of about 30,000 witnessed during the initial years of the decade," said Babbar Singh Khalsa, branch director of Knight Frank India in Ahmedabad.
According to the report, the city witnessed construction of just 3,398 housing units between January and March in 2019, almost three fold of 1,323 units launched during the corresponding period in the previous year. During the year 2018, city added 4,167 homes. It means that in past 18-months, 7,565 units were build, less than half of what 16,188 units that were sold on in 2018.
Ashish Patel, president of Gujarat Institute of Housing and Estate Developers (GIHED) said that because of back to back roll out of Real Estate Regulation Act (RERA), Goods and Services Tax (GST) and General Development and Control Reguations, new launches had dried up. "With things now getting stabilized, newlaunches will also increase. Also with drying up of inventory, builders will have to come up with new schemes," said Patel.
While the demand is going northwards, it is the affordable segment that is witnessing maximum demand. Close to 61 per cent demand is for houses upto Rs 50 lakh, while the share of houses worth Rs 75 lakh or more is just nine per cent. The demand in office space in the city has also witnessed a sharp rise. Compared to 0.91 million square foot of supply in H-1 of 2018, the city added 2.65 million square foot in first six months of 2019. The leasing segment witnessed 25 per cent growth to 0.59 million square feet, but this also raised office space vacancy to 34 per cent, the highest in top eight cities of the country.
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