Track2Realty Exclusive: Statistics only tell half the story and this old adage is all the more relevant in the property market where the transactions and appreciation/depreciation may or may not have a direct co-relation. In Gujarat real estate market the prophets of doomsday had a field day in the last over a year time due to slow pace of growth. They cited the National Housing bank’s Residex that shows Ahmedabad witnessed only 6 per cent growth in property prices in last one year.
The property price index in the city has remained volatile in last one year. The index was at 180 points in July-September quarter 2012, which increased to 191 in October-December quarter. Residex went down to 186 points in April-June 2013 quarter and reached 191 in July-September quarter 2013.
However, what this raw statistics does not reveal is the fact that during the same period many of the cities that Residex tracks down did witness either no change or downward change. Out of the 26 cities that it covers across the country, only 12 cities witnessed marginal appreciation, and two cities of Gujrat-Ahemdabad and Surat-registered 6 per cent and 5 per cent growth respectively. More importantly, the transaction rate in the cities of Gujarat did not dip. That reflects the property markets of Gujarat had been moving, even though the pace of movement has been slow.
Analysts tracking the market at ground zero seem to be bullish on the prospects of Gujarat real estate market. They maintain moderate property appreciation is actually indicative of the market’s resilience and the fact that speculative buying is not happening in this part of the world. That also means entry point is extremely attractive for the end users and the right time is now. After all, the state has seen a booming rise of big infrastructure and industrial projects coming up with rapid growth.
These factors definitely contribute in ensuring good returns on property investment. What has hampered the growth of the real estate sector is the negative sentiments borne out of negative macro-economic factors. The fundamentals of the property market are quite grounded to realism across the cities of Ahmedabad, Vadodara and Surat.
Dhaval Ajmera, Director, Ajmera Realty & Infra asserts that this is the right time to buy property in Gujarat. According to him, Gujarat as a state has seen remarkable growth in various verticals, real estate being one of them, which also is indicative of a healthy economic activity in the state. It is a known fact that Gujarat is acknowledged as the most industrialized state in India. The state currently is one of the fastest-growing states in the country and definitely has huge potential in terms of real estate investment due to industrial growth. The prices of properties and land will see a good return of investment in the forthcoming years.
He, however, does not think that discounts and freebies are way forward to entice the buyers. Many other analysts also feel that discounts and freebies that have been used as a marketing methodology only in those projects that have failed to take off. The right project in the right market at the right price point does not need to offer discounts as there are enough takers in the market.
“Developers are more focused towards rendering the buyers with value added services. Buyers are no longer wooed to discounts. The services and amenities offered to the investors through the projects play a significant role in translating into sales. These enhanced services are the driving force that bequeaths the end users for investments,” says Ajmera.
Manan Choksi, Regional Director, RE/MAX MGM also believes it is a good time to buy property in Gujarat. The prices are at the lower side and there seems to be positive sentiment from the political standpoint. He believes this is the right time for end users to identify his right entry point since inventory is easily available with decent room for negotiation.
“The discounts by various developers are translating into sales but all depends on the segment of property. There is a good movement in three, four and five BHK apartments. However, there is a total slowdown in plotting schemes. Offices of smaller footprint are getting sold but large spaces have few takers. In fact, discounts have acted counter-productive to sales in some of the cases. The builders providing discounts/freebies have usually not been able to sell 100 per cent of inventory in last six months,” says Choksi.
Property brokers active in the market assert that it would be safe to call that the Gujarat property market is a buyers’ market to a large extent as of now. But it would not be right to say that the price correction in the state has been a uniform pattern across the micro markets. In fact, semi urban market has seen more correction. There is no correction in the prime market. In fact in a few high end properties there is an increase in market price.
So, it seems ‘one size fits all’ solution may not be available in the property market of Gujarat; reasons why correction in certain markets are being projected as the overall slowdown when the data is collated for taking out average. But the right project in the right market at the right price point is still selling at a brisk pace. More importantly, since there is enough ready to move inventory available now in many of the prime localities across the state in general, and Ahmedabad, Vadodara and Surat in particular, it is turning out to be boon for the end users.
The property markets across the state of Gujarat may not be truly buyers’ market in the conventional sense of the term, but what can be vouchsafed is the fact that this is the right time to buy the property. The market is attractive not just in terms of the price point but also the kind of ready apartments with even discounts on offer in some of the cases; it may not be the same in the time to come. Post the General Elections it is anticipated that the economy at the macro level will start coming back on the track, and then there onwards the property market across the state of Gujarat will once again turn out to be red hot. Does not that sound tempting for the buyers who have the liberty of choice as of now to opt for ready to move apartment with prospects of handsome appreciation ahead.
