Over the past couple of months, no other Indian state has been talked about as much as Gujarat, owing to its Chief Minister who moved onto to be Prime Minister in Delhi. Moreover, Gujarat is part of the Delhi Mumbai Industrial Corridor (DMIC), which is an ambitious project being implemented with Japan’s ODA or aid with the sole aim of developing industrial zones. Ahmedabad is anticipated to be an important link in this corridor.
Now that Prime Minister Narendra Modi is in Tokyo, the Corridor plan gets further momentum and Ahmedabad, in turn, is expected to create more jobs, attract investment and ultimately generate greater housing needs.
This fast developing province has seen the decade-long efforts start to bear fruit in the area of infrastructure development especially in Ahmedabad, the commercial capital of the state, says Vivek Sahasrabudhe, Research Analyst at JLL India. The uninterrupted electricity and water supply, the wider roads and the rapid bus transit system have helped Ahmedabad to cement its position as a manufacturing hub, he said.
In the past, despite the city being known for its industries, particularly its textile and pharmaceutical enterprises, it did not create a sector-specific demand for real estate, unlike the IT/ITeS sector did for Bangalore and Pune. Up until recently, the city produced mostly blue-collar jobs and those employed preferred affordable housing, particularly in the unorganised real estate sector.
To attract the participation of the organised real estate sector, affordable and well-connected real estate developments were on the checklist of the Ahmedabad Urban Development Authority. Ahmedabad, unlike other cities, did not have any geographical constraints on expansion. Also, the committee refrained from giving any specific city node an undue advantage, due to which capital value appreciation was held in check for many years!
Now the growth registered in residential real estate prices is growing fast. Residex, the index published by the National Housing Bank covering price movements in urban and semi-urban areas, showed that Ahmedabad residential real estate prices have grown faster than other major Indian cities over the past four quarters.
It is true that current market sentiment has turned positive following the country’s recent general election but physical indicators have played a vital role too. The employment opportunities generated by the industrial and manufacturing segment have spiralled into the evolvement of real estate activity in recent times, says Sahasrabudhe.
With improved infrastructural facilities, many new manufacturers of automobiles, engineering and instruments have established themselves in the city and existing industries have been expanding their plants, especially on the outskirts of Ahmedabad in Sanand and Changodar. Coupld with this, the manufacturing hubs and logistics activity has also been growing fast, he noted.
Newly generated employment has looked at organised real estate to fulfil its housing needs as prominent developers have been offering small ticket size affordable dwellings in the outskirts of the city.