The fast track development of infrastructural projects have played a major role in creating connectivity and keeping the city centres from being overcrowded, the expansion of city’s municipal areas have ensured that they continue to offer most affordable housing options across segments.
With realistically priced residential projects available from affordable, mid-segment to luxury, it has become an attractive market for the NRIs that would also like to capitalize on its proximity to the financial hub of the country- Mumbai.
As per official data, of the 344 Smart City projects in Gujarat, 72% have been completed which offer a lot of potential in terms of real estate. The improved infrastructure will attract real estate developers, end-users and investors alike. Additionally, in cities such as Ahemdabad, Surat , and Vadodara, there has been a surge in construction of high-rise buildings and gated communities, offering a range of options for buyers .
Gujarat property market is different in terms of its demand drivers. While in the initial stages of its evolution the home grown end-users had the major share, the non-resident Gujaratis later gave the market momentum. Now with the growth of infrastructure on a roll, investors are taking it forward to the next level. The major housing markets in Gujarat are Ahmedabad, Gandhinagar, Surat, Vadodra, Rajkot, Gift City.
Ahmedabad was the most affordable housing market in India in 2022 with an affordability ratio of 22%, as per Knight Frank. The commercial capital of Gujarat, Ahmedabad enjoys excellent connectivity to the rest of the state. It serves as the gateway to the rest of the state. Sardar Patel Outer Ring Road, Metro Rail Project and addition of new town planning schemes are creating a vibrant residential and commercial real estate in the city.
Vadodara is Gujarat’s third largest city and another preferred investment destinations in Gujarat. It is seeing investment coming in from NRIs and investors from across the country. Its easy connectivity with rest of the state and proximity to Mumbai, makes it a great choice for corporations looking to set up base in Gujarat. Vadodara is part of the Smart City plan and has a booming IT/ITeS sector which is driving the demand for affordable housing units in the city.
Surat till now known for diamonds and textiles industries is now a modern metropolis with thriving small, medium, and large scale industries. Surat Navsari Industrial area and now th Surat Diamond Bourse are gaining traction among buyers and investors that will keep up the residential sales momentum. The east, north,
and south-east parts of Surat have witnessed the most rapid residential development over the years due to the presence of good social infrastructure, connectivity, and employment opportunities. However, the southwest and western parts of Surat are still in the nascent stages.
Gandhinagar, the capital of Gujarat is seeing steady increase in housing prices. With increase in investments into GIFT City, Gandhinagar is emerging as one of the fast-growing hubs for residential real estate.
GIFT City - After commercial, even residential real estate investments have picked up pace in GIFT City – India’s first international financial services centre (IFSC) in Gandhinagar. Some 55 lakh square feet residential real estate space is coming up in the campus with an investment of Rs 2,700 crore over the next five years that will be majorely cater to the population from outside the state working in Gift City. The average prices for housing are relatively higher than the rest of the state given the premium infrastructure.
Rajkot - Due to the presence of sectors such as jewellery, textiles, watches parts among others, Rajkot has excellent infrastructure and connectivity development under the Rajkot Urban Development Authority (RUDA). Many affordable residential projects are coming up in Rajkot and the upcoming hospitality, retail and business houses have helped to maintain the demand of housing in all segments.
OPPORTUNITIES & ADVERSITIES
Highlighting the growth & demand outlook for residential realty in the state, developers in Gujarat have seen inquiries increase in 2022 and believe the trend will continue in 2023 as well.
On the downside, higher construction costs have pushed up project costs by more than 20%. Interest rates have been rising since mid-2022 due to rising inflationary pressures, which is likely to put some pressure on inquiries especially for the affordable and mid segments.
The state’s real estate developers have also opposed the sharp increase in jantri rates which will adversely affect the real estate sector including the affordable housing that will also bear the hike.
Despite, the current challenges developers remain optimistic of the housing market resiliency and future growth. According to the Developer Sentiment Survey conducted by CREDAI and Colliers and Liases Foras, in Gujarat, 10% of developers believe demand will increase by 25% to 50% while 19% believe there might be a slight be a slowdown in 2023.
The positivity in the market is driven by the fact that people are upgrading their lifestyles and the overall economy is doing well so the residential real estate will continue to see good momentum.
GUJARAT AS A STATE HAS MULTIPLE DEMAND DRIVERS WHEN IT COMES TO HOUSING PROPERTY MARKET. END-USERS ARE AS RELEVANT TO GIVE MOMENTUM TO THE PROPERTY MARKET OF AHMEDABAD, GANDHINAGAR, SURAT, RAJKOT AND VADODARA AS THE INVESTORS.