99acres India’s No.1 Property Portal INSITE REPORT Ahmedabad October - December 2017 www.99acres.com 99acres 99acres 2 INSITE : AHMEDABAD India’s No.1 Property Portal India’s No.1 Property Portal INSITE : AHMEDABAD 3 Methodology FROM The Insite Report by 99acres.com captures the NARASIMHA’S DESK... quarterly capital trends and the annual rental analysis of residential apartments in key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Struggles of 2017 are expected to bear fruits in 2018; Pune, Chennai, Hyderabad, States might assure RERA-compliance and more Kolkata and Ahmedabad. In order to assess the prevailing accountability in the ensuing quarters sentiment, the report delves deep into demand and supply of properties across The real estate industry underwent The struggles of this year are varied budget segments and some of the most radical reforms expected to bear fruits in 2018, occupancy stages. While and avant-garde policy changes in which will see States assuring RERA- demand is a function of 2017. Residential demand, sales compliance and more accountability queries received, supply is and supply took a hit on the back of in the ensuing quarters. We also based on property listings uncertainties surrounding Real Estate expect more tax reforms in Union posted on 99acres.com in options for projects under PMAY. (Regulation and Development) Act Budget 2018-19 for increasing home Oct-Dec 2017. The ease in navigation and and Goods and Services Tax (GST). loan appetite and affordability. technological advances helped While the first half of the year was Demand is also expected to grow 99acres become 1.5x bigger than testimony to plummeting numbers, on the back of various infrastructure the next big competition. 99acres the second half saw stakeholders projects including new airports, has significantly gained time share in a contemplative mode. Buyers flyovers, metros and other Game Changers 2017 Demand-Supply Analysis both on mobile and desktop Contents 06 10 waited for RERA to unfurl its full connectivity links in the pipeline. platforms (up from 48 percent to Policy reforms that transformed the real Demand-supply trends of residential impact on property prices and Focus on smart city projects will also 51 percent among top four players estate market in 2017 apartments in Oct-Dec 2017 builders were seen acclimatising boost real estate sentiment. in December 2017), share of time to the new norms. Despite the Amidst the challenging market spent for app stands at 54 percent challenges, average weighted capital conditions, 99acres offered full RERA in December 2017*. Not only this, From Narasimha’s Desk Market Movers Annexures ‘asks’ did not go south barring 03 07 11 support and insights to buyers by the mobile application and site are Delhi NCR and Mumbai – where CBO’s perspective on current market News that impacted Ahmedabad’s providing project level RERA details most engaged with average time inventory overhang was highest sentiment realty market in Oct-Dec 2017 covering approval documents, spent 50 percent higher than the across the country. construction progress and legal next competitor. With the trust and Improved focus on budget housing compliance across platform. Buyers credibility that it has built, mobile National Outlook Ahmedabad at a Glance 04 08 segment, increased affordability post can also review RERA registration application traffic of 99acres has Snapshot of real estate ambience across Capital price movement in key tax incentives announced in Union status of agents. This is coupled grown by 120 percent, YoY. top 8 metro cities micro-markets of Ahmedabad Budget 2017-18 and repo rate cut with easy access via filters and *Source: SimilarWeb in August 2017 ensured consistent notifications. The site also assists end-user demand. Compact homes buyers in easy discovery of Pradhan Market Indicators 05 Ahmedabad 09 with modern amenities and good Mantri Awas Yojana (PMAY) projects. Narasimha Jayakumar Changes in capital rates and inventory Key highlights - Ahmedabad’s capital connectivity to the city centres ruled 99acres has also tied up with top Chief Business Officer 99acres.com status QoQ; and rental values YoY and rental market in Oct-Dec 2017 the roost in metros. banks to extend easy home finance 99acres 99acres 4 INSITE : AHMEDABAD India’s No.1 Property Portal India’s No.1 Property Portal INSITE : AHMEDABAD 5 National Outlook Market Indicators HOME BUYING SENTIMENT Capital Values Rental Values Supply RERA transformed the market from uncertain to mended buyer confidence in Oct-Dec 2017. Enquiries and sales improved marginally across cities. After an elongated lull, the premium market saw enhanced traction in cities like Bangalore and Pune, suggesting an impending revival. With improving clarity BANGALORE on GST, sales are expected to revive across categories and budget segments. DELHI NCR PROPERTY PRICES MUMBAI Price growth remained restricted across metros with inventory-heavy markets of Delhi NCR and Mumbai witnessing corrections in some popular housing pockets. Prices may further dip in luxury and ultra-luxury segments in the year because of low buyer appetite for such projects. Other categories are, however, CHENNAI unlikely to see any major correction in Jan-Mar 2018. PUNE HYDERABAD RENTAL LANDSCAPE The general wait-and-watch climate regarding home buying since the last one year led the rental market across cities to tread a growth path this quarter. The trend is expected to continue even amidst an improving buying KOLKATA sentiment owing to a prolonged decision making cycle in the wake of multiple market ambiguities. AHMEDABAD * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com SUPPLY The markets are plush with residential inventory, however, saleable supply in the primary market appears low on account of slow-paced registrations under RERA. Fresh inventory levels may soar in the ensuing quarters owing to increased registrations and new launches on the back of clarity in the norms. 99acres 99acres 6 INSITE : AHMEDABAD India’s No.1 Property Portal India’s No.1 Property Portal INSITE : AHMEDABAD 7 GAME CHANGERS 2017 Market Movers Affordable housing sales lift market sentiment REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 (RERA) Adherence to RERA norms and a large number of affordable project registrations The year was about realty stakeholders struggling and conforming to the biggest reform in the history of under the Act renewed homebuyer confidence. This pushed the city to become the real estate – RERA. The Act which fully came into force on May 1, 2017 sent the market in a frenzy. With second highest contributor in the affordable housing segment, at 24 percent of the many States failing to meet RERA deadlines, new launches were put on a back burner and buyers awaited more clarity impacting overall housing demand. While 2017 kept the market on tenterhooks, the New Year is total sales, only second to Mumbai. expected to bring perspicuity, trust and confidence. More States are expected to finalise rules, have functional RERA websites and start with the project registration, approval and complaint lodging processes. This will subsequently benefit demand and supply dynamics and take real estate closer to a revival mode. Metro Phase II strengthens connectivity grid Notification of rules – 26 states/UTs The detailed project report (DPR) for the second phase of Ahmedabad metro has Website – 16 States/UTs Permanent Regulators – 6 States/UTs provided the much-needed impetus to the transport network across Motera, Interim Regulators – 20 States/UTs Gandhinagar, Vastral and Thaltej. This phase would add 34.6 km to the existing two lines that are under progress as part of Phase I. Disclaimer: Data as on 31st December 2017 Highway projects reinforce the infrastructure initiative GOODS AND SERVICES TAX (GST) As part of the renovation drive across Gujarat, the foundation stone of national highways worth Rs 5,285 crore has been laid. The construction of Rs 962 crore Cable Introduction of a new taxation system after two big blows in the form of demonetisation and RERA jolted the market further. With the market getting acclimatised to the new tax reform, buyers stood away from under- Stayed Signature Bridge between Beyt Dwarka and Okha on NH-51 will lead this construction properties due to an effective 12 percent GST associated with such units. While ready-to-move infrastructure undertaking. affordable units were the flavour of the year, a steep fall in demand for the former category rocked the market in H2 2017. Ahmedabad utilises smart city project funds optimally Efficient and judicious utilisation of smart city project funds demonstrated Ahmedabad’s focus on strengthening IT infrastructure, development of new areas PRADHAN MANTRI AWAS YOJANA (PMAY) and management of its heritage. Out of the total Rs 196 crore allocated, Rs 80.15 The revised Credit Linked Subsidy Scheme (CLSS) under PMAY, which amended the carpet area in MIG-I crore has already been expended in the direction. category from 968 sq ft to 1,300 sq ft and under the MIG-II segment from 1,200 sq ft to 1,615 sq ft, came as a welcome move. The advantages of the change, however, are yet to fully unfurl. The affordable housing category already constitutes maximum demand across metros and the industry awaits CLSS to reach its full potential as the most significant housing demand driver. 99acres 99acres 8 INSITE : AHMEDABAD India’s No.1 Property Portal India’s No.1 Property Portal INSITE : AHMEDABAD 9 AHMEDABAD Ahmedabad at a Glance After recovering from the triple impact of demonetisation, the implementation of RERA and GST, the onset of festive season from October onwards marked a revival in end-user demand in the city. The average capital values recorded marginal increment in Oct-Dec 2017 as against Jul-Sep 2017, with suburban localities featuring at the top of the capital graph.