Realty Check: Why Gujarat’s Luxury Housing Sector Is Flourishing

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Realty Check: Why Gujarat’s Luxury Housing Sector Is Flourishing

| Updated: June 3, 2023 15:23

Gujarat’s growing affluent class of people is showing in the numbers. Last year, it reflected in the sales of luxury cars and demand for lavish homes. A thriving entrepreneurship community, increasing disposable income, adequate parking spaces, and a growing presence of multinational corporations are driving the realty sector in the state. It’s reported that Ahmedabad alone commands 50% of the inventory of such high-end apartments across Gujarat.

Gujarati’s mindset lends itself to investments in real estate – they have more faith in getting bumper returns from luxury houses than bonds, stocks, or fixed deposits.

Even in 2021, when the economy was in the throes of the pandemic, Gujarat’s real estate sector had been flourishing. Last year, the sector continued to record impressive numbers. According to Estate Regulatory Authority (GujRERA), the number of residential units priced above Rs 1 crore and available for sale rose by 73% from 8,213 in 2022 compared to 4,735 units in 2021.

This was the highest number recorded for luxury homes in five years, a national daily has published, citing data by GujRERA.

Further, GujRERA data reveals that the share of high-end units in total project launches rose to 11.6% last year as opposed to an average of 6.5% over the preceding five years. Approximately, 1,475 projects were launched in 2022 of which, 171 projects housed units cost more than Rs 1 crore. The data added that the number of units per project in the high-end segment has increased to an average of 48 units per project against 21 units per project in 2021.

“Due to inflation in construction raw material costs and rise in land prices, residential real estate costs have also increased by 20%. This has pushed a small section of inventory to above Rs 1 crore. At the same time,

Gujarat’s aspiration and affordability have also increased over time, which is fuelling demand for bigger, better homes. The hike in interest rates hasn’t quite impacted the luxury segment,” Shekhar Patel, president-elect, Credai National, was quoted as saying.

The lockdown, induced by the pandemic, created the need for expansive spaces since people were confined indoors. The affluent class was keen to replicate a semblance of the outdoor world in their backyard. Additionally, homes became offices, and people’s quest to upgrade their lifestyles was becoming increasingly obvious. Projects with amenities in the form of gym, swimming pool, walking track, gazebos and mini theatre were on in full swing.

Tejas Joshi, president, Credai Ahmedabad-GIHED, told the daily, “People moved to bigger apartments, driving the demand for three, four and five-bedroom apartments and homes. To meet the growing demand, Gujarat saw the launch of 13,275 residential units costing above Rs 1 crore since 2021 against 10,621 units launched between 2018 and 2020.”

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