Even as realty sector shows signs of recovery, launch of residential units in Ahmedabad declined by 13 per cent in 2018, while sales were up marginally, an industry report said on Tuesday. Ahmedabad was the only one among the eight major cities that saw lower launches, the report said.
Real estate consultant Knight Frank said in its report 'India Real Estate' that Ahmedabad witnessed launch of 4,167 residential units in 2018, 13 per cent lower than 4,790 units launched in 2017. Home launches were up by 12 per cent in Chennai (27,382 units), to as high as 157 per cent in Pune (32,684 units), and 220 per cent in Mumbai, which saw 74,363 home unit launches. The same were also up in Bengaluru (22 per dent), Kolkata (25 per cent), NCR (35 per cent), and Hyderabad (54 per cent).
"The dip in home launches, especially in the second half, had nothing to with any flaw in the market. It had more to do with players coming to terms with the government's new online development permission system launched in May. The initiative had teething problems, which affected new launches," Balbirsingh Khalsa, Ahmedabad branch director of Knight Frank, said.
The government reverted to the offline plan approval system in October, after which launches picked up. Knight Frank data shows that for 2,844 units, home launches in H2 of 2018 were only 2 per cent lower than the same period of 2017.
The report shows that quite similar to the past several years, majority of the homes launched were in the affordable segment. Ninety per cent of the total units launched were priced below Rs 75 lakh.
Home sales during the year grew by 3 per cent. The report said that 16,188 units were sold in 2018 as against 15,741 units in 2017. In H2, sales grew by 4 per cent to 8,101 units. Khalsa said that home sales were stable due to steady demand and availability of ready-to-move-in houses.
"Average home prices were up by 1 per cent in the second half of 2018, but remained steady over the whole year," he said.
The one impact of decline in launches, but steady sales, is that the city's inventory level has fallen sharply. In 2017, Knight Frank had estimated seven quarters to sell the unsold inventory, but this has now come down to just 3.7 quarters, which is less than a year. However, this could push up prices in the future.
