Residential supply may fall in Ahmedabad

With the new 10-year development plan by Ahmedabad Urban Development Authority (AUDA) still awaiting an approval from the Gujarat government, developers are holding on from announcing new projects. Industry players feel the Ahmedabad real estate market may see a drop in supply for next couple of quarters.

"The state government is yet to approve the plan. This may take anywhere between 4-6 months. In such a case, developers are waiting for an approved development plan before they can announce new projects," said Neeraj Tomar, head-Ahmedabad operations at Jones Lang LaSalle India.

Tomar added that a postponement in announcing new projects is likely to bring bring down supply of residential projects in Ahmedabad.

"The decline in supply might be a blessing in disguise since enquiry conversions are low in the real estate market. An increased supply, on the other hand, would have created further glut in the market," he said. According to D Thara, chief executive officer at AUDA, while the new development plan has done away with many contradictions that were present in the previous one, there are still certain issues raised by the industry players over the new one.

"There were some confusion in the development plan. We have sent it to the state government's urban housing department for approval. However, we will be taking applications based on the new development plan. The new plan emphasises a lot on providing affordable housing especially in the SP Ring Road vicinity," said D Thara, chief executive officer of AUDA.

However, ask Rajesh Brahmbhatt, CMD of Safal Group, an Ahmedabad-based real estate developer and he is now planning to delay announcing of his projects.

"There are couple of projects that we were planning. However, since the new development plan is yet to be approved by the state government we are planning to wait. There are other developers following suit which could bring down supply of residential projects," said Brahmbhatt.