News & Views on Indian Real Estate

Tuesday, May 13, 2008

Office rentals fall in Ahmedabad

Rentals of commercial properties, which had risen to prohibitory levels, have come down, bringing much respite to retailers and people in search of affordable office space, say realty observers. However, the slippage, along with stabilization of rentals of residential properties in Ahmedabad, has shrunk returns on investment in the real estate market. After rising steeply for 3 years rentals have shown resistance over the past few months in the city. The Ahmedabad market is yet to experience demand from IT/ITES companies that have been driving real estate growth in other cities.Property prices don't necessarily go down when rentals stabilize. The city's real estateis expected to show stability till 2009. Rentals have been a stable source of income for people who let out residential or commercial property. But decreasing rents discourage investors from holding on to their properties. The real estate market of Ahmedabad has been showing signs of stabilization and is expected to remain mild for some more time. There has been an oversupply of similar types of property. Realty investors are one of the biggest groups to park money in new projects in emerging areas. Shrinking returns dampen their interest in the real estate market. Due to which local developers have been on a land acquisition spree, but developing new properties doesn't seem to be on their agenda. Some builders, who have expressed their desire to expand aggressively, are using funds to build their land bank.

Vikas Bamotra said...

Some foremost developers based in the region say it is becoming more and more complicated for them to sell flats at launch stage due to lack of interest from speculators. This reflects on the inherent demand structure in the real estate market.
And it also efect the prices of real estate

Anonymous said...

but the development is going on full swing there.Why is that possible ?

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