Ahmedabad sees dip in residential launches
New residential units launches in Ahmedabad market have slowed down with developers waiting for the implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) before they go ahead with their projects.
According to the property consultant Cushman and Wakefield (C&W), the city witnessed 1,849 residential units being launched in the first quarter (Jan-April) of 2017, which shows a dip of 32.54% as against 2,741 units launched in the preceding quarter (Oct-Dec 2016).
The new launches in the first quarter remained almost flat as compared to the corresponding quarter in 2016. “Most of the developers have chosen to register their projects and comply with all the requirements under the RERA first and then launch their new projects. This is the trend that we are witnessing not just in Ahmedabad but across the country,” said Siddhart Goel, senior director, research services, Cushman and Wakefield India.
Analysts also opined that any projects launched close to the implementation of the project would have only three months to register, as projects started before May 1 are considered as ongoing projects. The time period for registration of such projects is three months from the implementation of the RERA staring May 1, 2017.
“The implementation of Goods and Services Tax (GST) is also one of the major reasons for slowing down new launches. There is still confusion prevailing about the impact of GST on housing, and the developers want to take the implications of the GST into consideration before coming up with new projects,” Goel explained.
Realtors, too, agree that the new launches declined in the first quarter.
“The new launches slowed down in Jan-April period partly on account of demonetisation spillover effect and the RERA. The developers were waiting for the new realty act to be fully implemented before they went ahead with their new projects,” said Ashish Patel, newly appointed president, Gujarat Institute of Housing and Estate Developers-CREDAI. Interestingly, the new launches have also dried up in May-June, say the developers.
“The supply side is also expected to be constrained in the short term for about six months or slightly longer mainly on account of the RERA and GST implementation. The developers will have to more or less change the way they are operating to comply with this and that will take some time,” added Goel.