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INSITE REPORTAhmedabad

w w w . 9 9 a c r e s . c o m

July - September 2017

From Narasimha’s Desk 03CBO’s perspective on current market sentiment

Gujarat RERA in Focus 04Snapshot of RERA’s implementation status in Gujarat

05

Market Indicators 07Changes in capital rates and inventory status QoQ; and rental values YoY

Market Movers 08News that impacted Ahmedabad’s realty market in Jul-Sep 2017

Ahmedabad at a Glance 10Capital price movement in key micro-markets of Ahmedabad

Annexures 13

National Outlook 06Snapshot of real estate ambience across top 8 metro cities

Demand-Supply Analysis 12

Contents

Demand-supply trends of residential apartments in Jul-Sep 2017

Methodology

The Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on 99acres.com in Jul-Sep 2017.

Ahmedabad 11 Key highlights - Ahmedabad’s capital and rental market in Jul-Sep 2017

RERA RoundupSnapshot of RERA’s implementation status across India

FROMNARASIMHA’S DESK...

The quarter ending September 2017 was marked by the implementation of the revolutionary bill – Real Estate (Regulation and Development) Act, 2016. The new regulatory act, combined with State-specific regulations and registration processes, made the developer community face higher levels of scrutiny and greater complexity than ever before. Amidst the commotion and convolutions that it proffered, property prices across major metros maintained status-quo, save Hyderabad, which witnessed affordable pockets gaining prominence and average weighted property prices going north, albeit modest.

The quarter also witnessed consumer activism on the rise and greater-than-ever digitalisation in the real estate industry. To gratify homebuyers’ hunger for validated and accurate information on real estate projects, 99acres.com equipped itself to be the first ‘RERA-ready’ portal. With access to the maximum number of registered projects across the country, it enables homebuyers to filter and shortlist RERA-compliant projects. Special features include tower-wise construction status, accessibility to view dealers’ compliance status and a

comprehensive RERA awareness portal for State-wise news and updates.

In the wake of the above radical reforms, which promise a cleaner, more transparent and unprejudiced real estate industry, while chances of price hike stand meek in the short-term, we expect demand to move up across metros, especially in budget-housing pockets. With policymakers initiating more economic stimulus in the form of repo rate cuts and Pradhan Mantri Awas Yojana (PMAY) gradually making headway, things are set to change with the hiatus in the industry looking to cease in the ensuing quarters.

Narasimha JayakumarChief Business Officer99acres.com

While chances

of price hike

stand meek

in the short-

term, demand

is expected

to move up

across metros,

especially

in budget-

housing

pockets

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Gujarat RERA

AUTHORITY WEBSITE

https://gujrera.guja-rat.gov.in

LATEST UPDATE• The State makes the list of registered projects and agents available on

Gujarat RERA website

Projects & Realtors

IN F CUS

690*Data shows approximate registrations till October 4, 2017 ** Source: State’s RERA website

• RERA rules notified

• RERA rules yet to be notified

• RERA Regulator appointed; portal launched

• Interim Regulator appointed; RERA portal not launched

• Interim Regulator appointed; RERA portal launched

TAMIL NADURegistered Projects: 89Registered Realtors: 110Project Applications Received: 252Complaints Filed: 100Website: www.tnrera.in

HARYANARegistered Projects: 264Registered Realtors: 150Project Applications Received: 550Complaints Filed: 160

UTTAR PRADESHRegistered Developers: 1062Registered Projects: 2400Registered Realtors: 633Complaints Filed: 125Website: www.up-rera.in

KARNATAKA Registered Projects: 260Registered Realtors: 159Project Applications Received: 1479Complaints Filed: 80Website: www.rera.karnataka.gov.in

GUJARATRegistered Projects & Realtors: 690Website: www.gujrera.gujarat.gov.in

MAHARASHTRARegistered Developers: 2100+Registered Projects & Realtors: 13,300Project Applications Received: 13,400Complaints Filed: 232Website: www.maharera.mahaonline.gov.in

*Data shows approximate registrations till October 4, 2017 ** Source: State’s RERA website

RERA Roundup




https://gujrera.gujarat.gov.in/

https://gujrera.gujarat.gov.in/

BANGALORE

DELHI NCR

MUMBAI

CHENNAI

PUNE

HYDERABAD

KOLKATA

AHMEDABAD

Market Indicators

* Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com

Capital Values Rental Values Supply

National Outlook

HOME BUYING SENTIMENT

Higher optimism among buyers post RERA implementation in States where the

portal is live and authority has been set is expected to uplift home buying

sentiment. Fence-sitters, deferring purchase decisions since demonetisation,

may enter the market in the ensuing quarters, pushing sales volume up.

PROPERTY PRICES

While muted sales in the primary market and ambiguous State norms kept a

check on prices till now, projects with RERA registration are expected to

command a premium across cities. Increased attempts to liquidate investments

will keep the market plush with inventory, constraining price growth.

RENTAL LANDSCAPE

SUPPLY

While RERA limited new launches, affordable housing bracket was testimony

to a few projects across city peripheries. Demand-supply gap in the

under-construction category trimmed. Free from GST impact, the secondary

market, however, will remain swamped with inventory.

Rental market continued to benefit in the wake of baffled home buying

sentiment, stemming from the collective impact of RERA and GST. Average

‘asks’ in the rental segment are further anticipated to tread a growth path

across metro cities.




Market MoversInternational investments on a riseFifteen Japanese companies committed to invest in Gujarat. Some 55 others have shown interest to explore investment opportunities in the State, especially in the industrial park dedicatedly being planned for Japan-based companies at Khoraj near Sanand in Ahmedabad. A Suzuki car manufacturing plant worth Rs 3,000 crore has also been launched at Hansalpur, about 170 km from Ahmedabad.

PM inaugurates Mumbai-Ahmedabad bullet train PM Modi laid the foundation stone of the much-awaited bullet train project between Mumbai and Ahmedabad. The 1.1 lakh crore high-speed rail project is anticipated to boost connectivity and urban development along the Delhi-Mumbai Industrial Corridor (DMIC). The project will reduce travel time between Mumbai and Ahmedabad by six hours.

Ahmedabad earns World Heritage City CertificateUNESCO graced Ahmedabad with India’s first World Heritage City tag, rendering it a prestigious spot amongst the other 250 global cities. The honour has led Ahmedabad join the likes of Paris, Cairo and Edinburgh. The status will boost tourism and hence, retail establishments in the city.

Road infrastructure on government’s radarRecognising the poor state of roads across Gujarat, the State government has allotted funds for an infrastructure overhaul. Out of the total State budget of Rs 158 crore, Rs 75 crore has been earmarked for Ahmedabad alone. The city roads are expected to witness a massive renovation drive between September and October 2017.




Ahmedabad at a Glance

Bodakdev 5,050 - 6 ,300 -2% 1%

Bopal 3 ,150 - 3 ,900 1% 1%

Chandkheda 2,400 - 2 ,800 2% 1%

Gota 2,900 - 3 ,300 0% 5%

Maninagar 3 ,300 - 4 ,100 0% 8%

Naranpura 3,500 - 4 ,900 4% 5%

Satel l i te 5 ,000 - 6 ,200 1% 4%

Science C i ty 4 ,150 - 4 ,700 1% 5%

South Bopal 3 ,200 - 3 ,700 0% 1%

Thalte j 4 ,650 - 6 ,000 -2% 3%

99ACRES OUTLOOK

The massive potential of affordable housing underlined

Ahmedabad’s realty landscape this quarter as the segment

continued to witness unrelenting focus from buyers as well

as developers. Consequently, capital and rental appreciation

remained concentrated in pocket-friendly locales of the city.

The ‘compact homes’ category, too, picked up momentum

as developers recognised the concentration of demand in

the smaller and economical housing segment. Enhanced

focus on the category is expected to ensure heightened

sales volume in the ensuing quarters.

Unlike many other States, Gujarat managed to set up the

regulatory authority and the website, however, registrations

in Ahmedabad moved at a snail’s pace due to short-staffing

of the authority. This hurt property launches and sales

in the current quarter. The uneasiness in the city’s realty

market is expected to continue until the loopholes in the

RERA infrastructure are sewed. The situation is tricky for

the smaller players in the industry, who fear being pushed

out of the market due to lack of competency in dealing with

RERA and GST compliances.

Meanwhile, Ahmedabad is witnessing a gradual exodus

of investors, particularly in the residential segment, due

to inactivity and meagre appreciation. Instead, the focus

appears to have shifted towards commercial locations and

assets. Greater investor interest will further be fuelled by

the international recognition of the region on the back of

the bullet train project and World Heritage City status.

AHMEDABADWhile RERA implementation improved market sentiment and enquiries in Jul-Sep 2017, it failed to bring the wary homebuyers back to the market, thus keeping sales volume low. Slow pace of project registration process and limited housing options emerged as the major bottlenecks for Ahmedabad’s realty landscape. The market was in a contemplative mode the entire quarter, with little appreciation in overall residential property prices.

Key Highlights

Average weighted capital prices in Ahmedabad remained under pressure, delineating a stagnant market this quarter. Marginal price rise was reported in the city’s eastern quadrant on account of its affordability quotient.

One of the oldest residential hubs in Ahmedabad, Naranpura topped the capital growth charts this quarter, with a four percent rise in property values, QoQ. Navrangpura and Vasna followed closely with three percent capital growth each, QoQ, riding on the benefits of being centrally located.

Strong demand for budget homes helped pocket-friendly locales witness healthy traction in Jul-Sep 2017. This led Vatva, Narol, Nikol, Naroda, and Vastral in East Ahmedabad to report a two to three percent surge in average residential prices, QoQ.

Bopal and Chandkheda in West Ahmedabad also saw prices growing by one and two percent, respectively, due to the ample supply of units priced under Rs 40 lakh.

Seamless connectivity brought residential pockets along the Sardar Patel Ring Road and New CG Road into limelight, helping these areas garner three percent growth, each, in capital ‘asks’, QoQ.

Affordability played a pivotal role in the rental market of Ahmedabad, too, helping it register a two percent appreciation in average rentals over the last one year.

Motera and Vaishnodevi Circle, with rental ‘asks’ prevailing around Rs 9 per sq ft, recorded the highest growth of 13 percent in rental values, YoY.

Ghatlodia continued to feature amongst the top-grossers with a 10 percent uptick in rental values between Jul-Sep 2017 and the same quarter last year.

Local i ty Average ‘Ask’ Rate (Per sq ft )

QoQChange

YoYChange

Price movement in key micro-markets

* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter

* %change represents quarterly capital movement * %change represents yearly rental movement

Naranpura

4

2

1

0

% C

hang

e

Locality

Vasna Sardar Patel Ring Road

Navrangpura New CG Road

Motera

14

12

4

2

0

% C

hang

e

Locality

Vaishnodevi Circle

Ghatlodia Paldi Makarba

8

3

4%

3% 3%3% 3%10

6

13% 13%

8%

10%

Top Performers - Capital Market Top Performers - Rental Market

8%




DEMAND-SUPPLY ANALYSISBattling to conform to RERA rules, developers in Ahmedabad put new launches at bay. Reduction in new inventory coupled with restricted sales in the affordable housing category led the city inch towards achieving a demand-supply equilibrium in the current quarter.

Key Trends

A few registrations under RERA adversely impacted demand for apartments, pushing it down from 76 percent in Apr-Jun 2017 to 70 percent in Jul-Sep 2017. Nine out of 10 buyers preferred ready-to-move units over under-construction properties.

More than half of the buyer demand in Ahmedabad remained concentrated in low and mid-income housing segments. Supply in the categories, however, was limited to approximately 40 percent, revealing a shortfall of 15 percent in budget housing stock. Lack of RERA expertise among smaller builders, who largely deal in affordable properties, appears to have hurt the supply of units priced under Rs 40 lakh.

The demand-supply equilibrium in the high-income category remained unchanged from the previous quarter. This is likely to cloud the forthcoming quarters, as well.

Meanwhile, the availability and preference for premium properties priced over Rs 60 lakh witnessed a marginal rise as experienced builders found it easier to get their projects registered with the regulator. Most of the RERA-approved luxury offerings were reported in West Ahmedabad.

Within Rs 25 Lakh Rs 25-40 Lakh Rs 40-60 Lakh Rs 60 Lakh - Rs 1 Crore Rs 1 Crore and Above

Jul-Sep 2017

20

30

10

5

0

Demand

15

Supply

8%

Apr-Jun 2017

Jul-Sep 2016

Jul-Sep 2017

Apr-Jun 2017

Jul-Sep 2016

Jul-Sep 2017

Apr-Jun 2017

Jul-Sep 2016

Jul-Sep 2017

Apr-Jun 2017

Jul-Sep 2016

Jul-Sep 2017

Apr-Jun 2017

Jul-Sep 2016

5%4%-2%-10%

-9%-9%-6% -6%

12%

10%11%

Jul-Sep 2017

Apr-Jun 2017

40

20

0

30

8074% 71%

60

10

Demand SupplyUC UCRTM RTM

70

50

25

Graph depicts the availability of residential apartments wrt other property types, QoQ, along with the distribution of under-construction and ready stock

Distribution of Residential Apartments

Locality Jul-Sep 2017 % Change Locality Jul-Sep 2017 % Change

AnnexuresCAPITAL VALUES - APARTMENTS RENTAL VALUES - APARTMENTS

Ambawadi 6150 0

Bodakdev 6300 -2

Bopal 3650 1

Chandkheda 2800 2

Chandlodia 3050 1

Drive In Road 5350 2

Ghatlodia 3850 -2

Gota 3200 0

Gurukul 5725 -1

Jodhpur 5920 0

Maninagar 3950 0

Motera 3475 1

Naranpura 4950 4

Naroda 2250 2

Narol 2000 3

Navrangpura 6100 3

Nehru Nagar 5750 -1

New CG Road 3325 3

New Ranip 3000 -3

Nikol 2250 2

Paldi 5630 1

Prahlad Nagar 5900 -2

Ramdev Nagar 5100 -1

Sardar Patel Ring Road 3300 3

Satellite 6260 1

Science City 4550 1

Shahibaug 6270 -2

South Bopal 3700 0

Thaltej 5350 -2

Vaishnodevi Circle 3475 0

Vasna 3500 3

Vastral 2200 1

Vastrapur 5150 -3

Vatva 1900 3

Vejalpur 3580 0

Ambawadi 15 3

Anand Nagar 16 -6

Bodakdev 15 0

Bopal 11 5

Chandkheda 8 7

Chandlodia 9 0

Drive In Road 14 -3

Ghatlodia 11 10

Gota 8 0

Gurukul 13 0

Jagatpur 8 0

Jivraj Park 12 0

Jodhpur 16 3

Makarba 13 8

Maninagar 12 0

Memnagar 14 0

Motera 9 13

Naranpura 13 0

Navrangpura 16 7

Nehru Nagar 16 3

New CG Road 8 0

New Ranip 7 0

Paldi 13 8

Prahlad Nagar 17 6

Ramdev Nagar 15 7

Sargasan 7 0

Satellite 15 3

Science City 11 5

Sola 10 0

South Bopal 11 0

Thaltej 14 0

Vaishnodevi Circle 9 13

Vasna 11 -8

Vastrapur 16 7

Vejalpur 12 0

*All prices are per sq ft rates *Capital change depicts quarterly alterations in average ‘asks’ *Rental change depicts yearly alterations in average ‘asks’

Graph depicts the fluctuation in supply wrt demand for residential properties in various budget categories

70%

-8%0% 0%

76%




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insite report - 99acres.com · gujarat rera in focus 04 snapshot of rera’s implementation status...

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