42,000 houses in Ahmedabad have no takers: Study

AHMEDABAD: Out of the total 42,000 unsold residential units in the city, 12,000 are presently in West Ahmedabad, making it one of the worst performing in the real estate market. These units are lying unsold for the past three years. A report by property consultant -India Real Estate by Knight Frank India -reveals that Bopal, SG Road and Thaltej will take over three years to offload the current unsold units.
The half-yearly (JanJune 2015) report says that overall Ahmedabad has 42,000 unsold residential units, out of which 13,400 units are in eastern Ahmedabad and have been lying unsold for the past two years while northern part of the city, which includes Gandhinagar, has 12,000 unsold units for the same period.
During the last six months, Ahmedabad has recorded a five-year low sales volume. Sales during H1 2015 have been 26% lower than the same period last year.
The report says that developers in the western part of the city are restricting new launches to salvage the situation and push sales. Out of the total new aunches in H1 2015, 86% were below Rs 25 lakh pro ects and they are in eastern Ahmedabad. In the next six months, new aunches are expected to increase by 36% , the report said.
With prices in other parts of the city breaching the Rs 3,000 per square feet mark, east Ahmedabad has emerged as the most affordable zone.
"While Naroda, Nikol, Vastral and Kathwada road in east Ahmedabad have witnessed maximum new aunches in the first six months, new launches in western part of the city have dropped as developers are still trying to sell some previously launched pro jects," says the study.
The study also reveals that premium units, comprising apartment above Rs 1.5 crore, are on a stickier wicket. “Unsold inventory in the entire city will take two years to sell whereas premium units will take five years to sell. Higher launches are adding to the pressure for developers,“ said Balbirsingh Khalsa, National Director, Industrial and Head­Ahmedabad, Knight Frank India.
The report predicts that sale of residential units will increase in Ahmedabad by 11% but price will grow only by 3%.
However, when compared to the rest of the country, the report says that Ahmedabad is still lowest in price, and has performed relatively better than most cities. "Ahmedabad will surpass Chennai and Hyderabad in July to December months as there will be 6,800 launches in the city," says the report.