Ruchika Sethia bought her second house in Ahmedabad —a city she is convinced will yield high returns on real estate.
Her parents stay in the city, property is cheaper and purchasing a second house there makes financial and emotional sense, Sethia says. Besides, she has heard of some of her friends liquidate their real estate investments for a profit, in a short span of having invested.
Annual demand in the Ahmedabad residential and office market grew 58% and 88%, respectively, year-on-year in 2022, considerably higher than the national averages, according to Vivek Rathi, director, research, at Knight Frank India Pvt.
High affordability, comparatively lower prices per square foot and an improving local economic environment remain compelling drivers for the Ahmedabad residential real estate market.
Ahmedabad is one of the smallest real estate markets in India among the eight cities that Knight Frank tracks. It is recovering well from the pandemic lows, Rathi said.
He underscored that the office market scaled a historic high of 2.2 million square feet, while the residential market at just over 14,000 units of sales is very close to the levels seen before the pandemic.
The fact that Ahmedabad has experienced heightened traction in a less-than-ideal economic environment shows the improving stature of its market, according to Rathi.
The dedicated push by the state and central governments to make it an economic hub, low real estate costs and abundant connectivity infrastructure within the city make it an attractive real-estate destination for a homebuyer or office occupier.
Ahmedabad is predominantly an affordable real estate market among all the top eight cities of the country, said Santhosh Kumar, vice chairperson at Anarock Property Consultant Pvt.
Rapid industrialisation, proposed infrastructure development, good connectivity, GIFT city—one of the first smart cities in the country—and expressways are major factors spearheading realty growth in Ahmedabad over the last few years, particularly affordable housing.
Ahmedabad also emerged as one of the favorites for property investment among the tier two and three cities in a consumer-sentiment survey by the company, Kumar said.
The city has seen the new launch supply of approximately 20,000 new units in 2022, according to an Anarock research.
Out of this total new supply, nearly 57% is within the affordable category and priced within a budget of Rs 40 lakh, followed by 27% in the mid segment that is priced within Rs 40–80 lakh, 10% in the premium segment between Rs 80 lakh to Rs 1.5 crore and the remaining 6% within the luxury segment priced at over Rs 1.5 crore.
Not just Ahmedabad, but cities like Coimbatore, Indore, Jaipur, Surat, Visakhapatnam, besides Goa are all all evolving fast in real estate, said Ritesh Mehta, senior director and head for west and north—residential services and developer Initiatives—at Jones Lang LaSalle Inc.
While improving infrastructure and connectivity are aiding real estate growth across these cities along with opportunities for growth, each of these have different drivers of growth, he said.
In Surat for instance, there is a huge demand for luxury residential real estate, driven by factors like accessibility to Mumbai and the upcoming Diamond Bourse. People are moving back to native towns like Coimbatore and Indore, which are seeing an uptick in job opportunities , along with good health infrastructure.
The government’s affordable housing projects, subsidies to manufacturing zones in some of these cities and rising job creation is also driving growth across these cities, Mehta said.
The key, of course, remains affordability, he said.