City Search:VADODARA

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Realistic markets high on investors' wish list

Posted on Mar 24, 2015


“The enquiry levels with various developers across the cities of Ahmedabad and Vadodara have increased. The transaction volume is also much better this year than in the last three years and it seems that the two property markets are on their way to revival. The two are an ideal market for both the home buyers and the developers since even the macro economic outlook is brighter. Even more encouraging is the fact that there hardly seems to be any chance of significant price hike in the next few months,“ says a broker to Dushyant Sharma, a prospective homebuyer.

The statement of this property broker has left the homebuyer Dushyant very confused. Isn't he talking against the demand and supply fundamentals of economics? If the demand is all set to increase, then the price hike is a logical conclusion. However, a closer look at the economy of the two cities in general and its property market in particular suggests that the broker is right in his assessment of the market.

Real estate markets across the country have the uniform pattern of being speculative if the given market is high on the wish list of investors. On the contrary, end-user driven markets are always modest in appreciation but nevertheless carry genuine appreciation and provide a level playing field to all the stake holders, including the buyers. However, the property markets of Ahmedabad and Vadodara defy this conventional wisdom of economics. The micro markets of the cities have traditionally been high on the wish list of the investors, yet have never been speculative by any stretch of imagination. What makes Gujarat property market so realistic and different from the rest of the country? Analysts believe that the property market dynamics of the region cannot be disconnected with the overall economy of the region. The pockets of affluence are always balanced by the cost conscious spending habits in the state and that reflects in the property market as well.That may be the reason that unlike other property

markets, the residential developments in the city seem to be customised with various projects meant for different class of people.

A prominent realtor believes that with steady demand being noted for affordable housing segment, residential developers have now recognised the prospective evolution of this sector. He says, “It is a realistic market at a time when property markets across country are speculative. The current momentum for investment in the two cities is quite stable, but it is temporary as Ahmedabad and Vadodara's potential is strong and based on real and concrete growth. It will soon resume the progressive path. Looking at the current scenario for Ahmedabad and Vadodara, the future yield will be high, making investors compliment their investment.“

Property watchers in these markets maintain that the property rates here are still realistic as compared to other cities which bode well for investors and developers. This is often seen as a strange paradox at a time when the cities of Ahmedabad and Vadodara are witnessing increased focus on industrial and other economic activity.Various industries in and around the two cities are fuelling demand in Ahmedabad and Vadodara.

Further, since the investors in these markets are mostly local people who are not investing in the property for shortterm trading, the market is not at all speculative. Most of the Gujaratis are investing beyond one house for long term capital appreciation or to park money in a safe investment instrument.There are hardly any outside investors in pumping money for speculation.

At present, a realisation has gained ground among the developers to maintain a stable trend, something that may be a case study for the developers operating in other highly leveraged markets. In a nutshell, the property markets of Ahmedabad and Vadodara are uniquely poised today in the sense that these markets are pretty high on the wish list of the developers, yet not speculative in terms of their rental yields or capital appreciation. These are the markets meant only for the endusers or the investors who have a long gestation period in mind.

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Demand increases for residential houses in Vadodara

Posted on Oct 18, 2014
Demand for residential houses has risen by 9 per cent in the Jul-Sep 2014 quarter which had dropped by 3 per cent in the Apr-Jun 2014 quarter, as per the data available with Magicbricks. About 29 per cent buyers were looking for residential houses in the Jan-Mar 2014 quarter, which dipped to 26 per cent in Apr-Jun 2014 quarter. However, in the Jul- ...
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Ashiana Housing gets land clearance for Rs 100 cr project

Posted on Apr 11, 2013
Marking its foray into the real estate space in Gujarat, Ashiana Housing Ltd, a New Delhi-based real estate developer on Tuesday informed that the company has received land conversion approval for its project in Halol near Vadodara. The company will develop low-rise affordable housing project with over 500 units spread across 10.65 acres. “We have ...
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