Subdued demand led to a decline of 24 per cent in new residential unit launches in Ahmedabad in calendar year 2014. As against 6300 new residential units being launched in 2013, Ahmedabad saw only 4800 new units being launched in 2014, says the latest report by international property consultants - Cushman & Wakefield.
As per the report, while Ahmedabad saw a decline of 24 per cent in new residential unit launches, the overall decline across top eight cities was around 12 per cent y-o-y in 2014 with total launch of 153,000 units. The top three cities of Bengaluru (27 per cent), NCR (17 per cent) and Mumbai (16 per cent) comprised of 60 per cent of the total new launches in 2014. In terms of decline in new unit launches dropped, Hyderabad saw the highest decline of 46 per cent as developers reconcile to the changing market dynamics post the bifurcation of the state, the Cushman & Wakefield report stated.
"Despite the upliftment of economic sentiments post the election, the end user uptake of residential units has been restricted leaving a reasonable unsold inventory that developers would like to off load. In addition to that, the industry is expected to see some significant regulatory changes in the coming months with the first full - time budget being presented later in February, which may give a clearer indication on the regulatory and legislative framework for the future," said Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.
Nationally, as per the report, mid segment residential units continued to remain favorite amongst developers with a two-third share in total launches; also, unit launches in this segment increased by 5 per cent from the previous year. Unit launches in the high-end segment dipped by 29 per cent in a year; whilst in the affordable segment they declined by 38 per cent from the previous year. Although luxury units contributed only one per cent to total unit launches, they increased by five times from the previous year. In Ahmedabad, as per Cushman & Wakefield, the decline in new unit launches was primarily due to prevailing subdued demand conditions, which forced developers to postpone new project launches and focus on completing under construction projects. Alongwith the decline in unit launches, average number of units per project decreased from 396 in 2013 to 191 2014, indicating the developers' preference to launch small-sized projects that can be quickly executed and sold.
Further, in 2014, new project launches were concentrated primarily in the peripheral locations of S.G. Highway and West Ahmedabad. Unit launches in the affordable and mid segment declined 55 per cent and 11 per cent, respectively from the previous year, due to the prevailing low demand.
Moreover, peripheral locations of S.G. Highway (Gota, Vaishnodevi) and Bopal witnessed some activity due to attractive ticket size offerings in the range of Rs 20-40 lakhs.
Meanwhile, quoted capital values largely remained stable during the year due to subdued demand for residential units, the report stated. Going forward, Bopal may emerge as a key residential location due to its proximity to the business districts in Prahladnagar and along the S.G. Highway, and improving physical infrastructure in the region.