April-June: Home sales drop by 94% in Ahmedabad

AHMEDABAD: The Covid-19 pandemic has hit real estate market in India very hard and Ahmedabad is no exception.

The home sales in the city slumped by 94% and new project launches by 68% in April-June quarter mainly due to the Covid prompted lockdown.
The Ahmedabad market saw only 252 residential units being sold in the second quarter of the current calendar year as against the sales of 3,987 units during the same period in 2019, says the latest report released by the real estate consultancy firm Knight Frank India.
Similarly, the launch of new residential units also plummeted to 525 units in the second quarter from 1,641 units in the corresponding period last year.
The erosion in second quarter sales has brought half-yearly sales in 2020 to its worst level in a decade. The housing sales declined by 69% to 2,520 during January-June 2020 from 8,212 units in the same period last year.
During the same time, new launches came down 23% to 2,627 in H1 2020 as against 3,398 in January-June 2019, the report adds.
“Negligible sales and sluggish demand resulted into weighted average price easing 1.9% to Rs 2,795 per square foot in H1 on year-on-year (YoY) basis. Ahmedabad market, however, has the lowest realty prices in India,” the report added.
“The pandemic in H1 2020 has pushed developers to negotiate more aggressively with potential buyers on price and payment terms in order to sustain sales levels. Increasing incidences of buyers cancelling purchases due to fear of income loss and banks taking more stringent loan underwriting measures even with home buyers, have severely curtailed sales,” said Balbirsingh Khalsa, national director-industrial and logistics, Knight Frank India.
Stating that Ahmedabad is among the most affordable residential markets among India’s top eight cities,” Khalsa added, “Developers in the city are well aware of the price sensitive nature of the market and have achieved a fair amount of success in liquidating inventory and maintaining financial health.”
The unsold inventory in Ahmedabad market eased 3% to 9,744 units in Jan-June period.
“Ahmedabad market has strong fundamentals with unsold inventory remaining very low. As the sentiment improves, this market will see a fast recovery. From the investment point of view, land and residential market in Ahmedabad is very good,” said a senior official of Knight Frank India.