Ahmedabad has emerged as a significant centre for finance, education, and culture in the country, with considerable promise in the Indian real estate realm as well. Evolving from a lively trading hub to a vibrant city, Ahmedabad has experienced a remarkable shift in its housing scene, fuelled by economic growth and forward-looking urban planning. Today, the residential market in the city has garnered substantial attention from investors and home seekers alike, witnessing notable trends shaped by changing consumer preferences.
A Snapshot of the Past Year
In 2023, Ahmedabad experienced a transformative period in its residential real estate sector, marked by prominent developments.
One of the most striking observations was the substantial increase in new housing supply, soaring by an impressive 71% compared to the previous year. This surge underscores the growing confidence of developers and investors in Ahmedabad’s property market, reflecting positively on the city’s economic prospects and urban growth trajectory.
A significant portion of the new supply—33%—fell within the INR 45-75 lakh price bracket, indicating a concerted effort to cater to the middle-income segment, which forms a substantial portion of the city’s housing demand. Locations such as Zundal, Shela, and Nava Naroda emerged as focal points of development activity, witnessing a flurry of new residential projects.
Simultaneously, Ahmedabad saw a remarkable uptick in housing demand, recorded at an impressive 131% growth year-on-year, and reflecting a combination of factors, including population growth, increased urbanization, and favourable economic conditions. In terms of sales, homes in the INR 45-75 lakh price range dominated, accounting for 30% of total sales, while followed closely by the INR 25-45 lakh bracket, which claimed a 26% share. This preference for moderately priced homes indicates a discernible trend among buyers, who are seeking affordable yet quality housing options in Ahmedabad.
Strong YoY Growth in Residential Demand While New Supply Falters
In Q1 2024, Ahmedabad’s residential sales stood at 12,920 units, marking a robust growth of 78% in sales compared to the sales figure Q1 2023. However, when analysing the quarter-on-quarter performance, Q1 2024 saw a decline of 16% compared to the preceding quarter, Q4 2023, when sales was recorded at 15,310 units.
Despite this decline, the year-on-year comparison indicates potential for substantial growth, highlighting that while short-term fluctuations may occur, the long-term outlook for residential sales in Ahmedabad remains positive, supported by underlying market fundamentals and growth drivers.
Meanwhile, the city witnessed a substantial decrease in new housing supply in Q1 2024, with only 3,120 units launched, marking a significant decline of 64% compared to the year ago period of Q1 2023 which saw 8,650 units launched.
Additionally, when compared to the previous quarter, Q4 2023, there was a decrease of 66% noted. This sharp decline in new supply indicates a notable shift in the market dynamics in Ahmedabad's residential real estate sector, suggesting a possible slowdown in construction activity or a deliberate adjustment in response to changing market demand or supply-side constraints.
Summing Up
Ahmedabad's residential real estate sector in Q1 2024 reflects a dynamic landscape characterized by contrasting trends. While sales experienced a temporary decline from the previous quarter, the year-on-year growth remained robust, indicating the underlying resilience of the market. However, Q1 2024 saw a significant decrease in new housing supply compared to both the previous quarter and the same period last year. It underscores the need for developers to adapt their strategies to align with evolving demand patterns and market dynamics.
Overall, while the residential market in Ahmedabad may experience occasional fluctuations, the city's status as a prominent economic and cultural centre, coupled with its growing population and urban development, suggests continued opportunities for growth and investment in the real estate sector.
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