Ahmedabad’s strategic location, well-connected infrastructure, and flourishing industries have attracted a diverse demographic, including professionals and students. Post the pandemic, renewed focus on owning homes and the increased trend towards the adoption of remote work have led the residential market in Ahmedabad to showcase sizable growth and demand in the first half of 2023 (H1 2023).
Growth in New Supply
With the new supply of 30,160 units, the Ahmedabad residential market registered a growth of 107 percent during H1 2023 when compared to the same period in the previous year, H1 2022.
The year-on-year growth rate is steeper at 126 percent, indicating a substantial development in the city’s housing offerings and signifying Ahmedabad’s evolving status as a preferred residential destination and a viable option for real estate investment. In recent times, as more multinational corporations set up operations in the city, professionals from different parts of the country have flocked to Ahmedabad in search of employment opportunities. The resultant influx has catalyzed the demand for modern, well-designed residences equipped with amenities that cater to contemporary lifestyles, spurring developers to launch their projects actively.
Cheer For Home Buyers: New Supply Catering to the Middle Range
In the real estate landscape, the significance of price segmentation cannot be emphasized enough.
One of the key observations regarding the new supply in H1 2023 is the dominance of residential units falling within the INR 45-75 lakh price bracket. Remarkably, this segment captured a substantial 41 percent share of the market.
This underscores the importance of catering to the middle-income group, which forms a substantial chunk of potential buyers. Developers are evidently aligning their offerings with the budgetary constraints and aspirations of this demographic segment, making housing options more accessible and inclusive.
3BHK Housing Units Take the Lead
Understanding the configuration preferences of homebuyers is pivotal for developers in building their projects. Interestingly, 3BHK unit configurations comprised the majority share in new supply during H1 2023, commanding a significant 51 percent share. This could be attributed to changing lifestyles, wherein families are seeking more spacious living arrangements to accommodate various needs, especially in an era of remote work post the pandemic. 2BHK homes followed closely, capturing a 34 percent share of the total new supply. Home buyers, thus, can conveniently choose between 3 BHK and 2 BHK homes, these configurations offering a viable balance between space, functionality, and affordability.
Gradually Rising Prices
Price appreciation is a key indicator of the real estate market's health and stability. A gradual increase in prices often signifies a balanced market where demand and supply are well-matched. Over the span of a year, the weighted average price for new supply has exhibited a steady upward trend. Comparing H1 2022 to H1 2023, the price has risen from INR 3,700-3,900/sqft, reflecting an annual appreciation rate of 7 percent. This gradual increase indicates a stable and sustainable growth trajectory, reassuring both developers and potential buyers of the market's resilience.
Thus, Ahmedabad's residential market has come a long way, its journey of growth and development reflecting not only economic progress but also the aspirations of its residents. While the focus on INR 45-75 lakh price range highlights responsiveness to middle-income buyers, the developers’ emphasis on 3BHK units has strongly demonstrated evolving home buyer choices, boding well for the market.
