Cheer up! Realty rates will come down by 2011-end

Ahmedabadf you belong to the middle income group and are thinking of buying an apartment in Ahmedabad, you would be well advised to wait till 2011-end. The 2010 report of Credit Rating and Information Services of India Ltd (CRISIL) on real estate in the city says that by the end of 2011, there may be an oversupply of 2 bedroom-hall-kitchen (BHK) units in the city.

Most realty experts agree with CRISIL’s assessment, and say that the expected oversupply of residential units in the city will stabilise (or even bring down) property prices by 2011-end.

The CRISIL report says that an estimated 24.5 million sq. ft of property will be built in Ahmedabad between 2009 and 2011. But the total demand for propertyin this period will come to around 20 million sq. ft.

Most new projects in the city are for western Ahmedabad which has a lot of open land along the SG highway. Developers have planned large integrated residential townships along the highway, and in Naroda, Chandkheda and eastern parts of Maninagar.

The report further says that the market for residential real estate has revived after a year’s slump, and the demand from end-users and investors has risen. The Centre’s stimulus package, declining interest rates on home loans, a rising equity market and better job prospects had all contributed to the revival. As a result, property transactions had increased in the March-November 2009 period.     More on p14