Plummeting Input Costs and Low Demand Rule Property in Ahmedabad

Ahmedabad Property at Makaan.com

Though Ahmedabad property market is all poised to garner the attention of retail market companies and investors, the real state in the city is not performing that well. The overall realty market failed to pick up in 2013, resulting in slump in rates of residential prices over a majority of its localities. Some of the high-end localities too underwent an appreciable decline in property rates. While the rate of fall across localities such as Ambavadi Maninanagar, and New CG Road underwent a Q-o-Q decline of 3-4%, property in Ahmedabad witnessed a sharp fall in Paldi, Naranapura, S G Highway, and Vasna over the same period. At Chandkheda, Vasna and Naranapura, the prices underwent a steep fall of 12-20% in the last quarter of 2013.

While in Gota, Prahlad Nagar and Drive-in-Road, the rates of property in Ahmedabad did upscaled, but the overall picture is not that convincing. The pitfalls for the same are several. The rapid pace at which low-income groups are shifting to urban areas has proved as a dampening factor for real estate in the city The increasing number of ghettos has become a cause of big concern for authorities. These slums are eating away the open spaces and green cover, leaving the developers with less available land. Moreover, these slums thrive on water and electricity acquired by illegal means, thus posing an extra burden on authorities.

The declining demand for Ahmedabad property has resulted in lower rates of inputs, especially cement. The price rates of cement went down by about 13% in last quarter of 2013. Unlike tier-1 cities, where it is very hard to imagine the input costs to decline even a bit, the prices have plummeted to a great extent in Ahmedabad. The real estate price rise in this city has also been a marginal number: a modest 3% price appreciation indicates that the demand from end-users is not up-to-the-mark.