Ahmedabad property prices rising
Three years ago, when pharma executive Prakash Rao moved from Pune, he was thrilled to discover that he was able to fulfil his dream of buying an affordable home in Aapnu Amdavad.
Brand new three-bedroom apartments of around 1500 sq ft were going for around Rs 15 lakh in upmarket areas like Satellite and two-bedroom ones for around Rs 12 lakh.
Today, there is no supply of new apartments below Rs 35-40 lakh in this area and even old, pre-earthquake apartments go for Rs 25 lakh-30 lakh. To make matters worse, home loan interest rates too have gone through the roof from 7.5 – 8% then to over 11% or more now.
A recent internal HDFC report observes that Ahmedabad may be still economical by 20-30% as compared to other cities, but the average price appreciation for new properties in the range of 35-40% over the last year has hit affordability and marginalised the middle-class segment.
“A majority of new residential schemes are high-end 3BHK and 4 BHK apartments, luxurious bungalows and villas though the actual demand is for smaller residential units, which has resulted in a skewed demand-supply situation,” states the report.
As realtor Vijay Shah says, “Even hitherto affordable areas like Chandkheda have gone out of reach for the middle class.”
“Property prices have zoomed in three years. Developers are not putting up 2BHK housing after withdrawal of tax benefits under section 80IB. It’s not difficult to see why middle class is completely squeezed out of realty,” explains Kishore Dedhia of Space Management.
So, who is buying into Amdavad realty? According to realtors, with affordability going out of the window in the past three years, only affluent locals like businessmen were buying properties.
“Earlier, 80% of property buyers were locals. Today, nearly 50% of buyers in the high-end property are non-Amdavadis. Increasingly, NRGs and Gujaratis settled outside the state are lapping up property as they find it affordable,” points out developer Jaxay Shah.
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Very true, I support it 100%