H1 2016, a recap

- A recovery predictedINDIA

REAL ESTATEJULY – DECEMBER 2016

AHMEDABAD

AHMEDABADREAL ESTATE

H1 residential market recap

LAUNCHES GREW BY 9%, SALES JUMPED BY 10% YoY IN H1 2016

We predicted 27% growth in launches and 15% growth in sales

for H2 2016, but Ahmedabad suffers a setback

New launches plunge by 31%; Sales decline by 18%Half yearly trend in launches and sales

H2 201

1

H2 201

2

H2 201

3

H2 201

4

H2 201

5

H2 201

6 -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

14,

051

14,

569

11,

938

8,0

19

9,0

75

7,4

00

No. o

f uni

ts

H2 201

1

H2 201

2

H2 201

3

H2 201

4

H2 201

5

H2 201

6 -

4,000

8,000

12,000

16,000

20,000

17,

874

9,5

22

14,

058

4,9

91

7,4

91

5,2

00

No. o

f uni

ts

31%

18%

Drastic fall in H2 2016 has pulled the annual numbers to

below 2015 performance

New launches dip by 10%; Sales witness a relatively restrained decline of 5%

Yearly trend in launches and sales

2010 2011 2012 2013 2014 2015 2016 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

19,

424 29,

694

30,

577

25,

592

18,

490

16,

826

15,

956

No. o

f uni

ts

2010 2011 2012 2013 2014 2015 2016 -

10,000

20,000

30,000

40,000

50,000

33,

175

45,

120

30,

758

23,

867

14,

011

15,

553

14,

009

No.

of u

nits

10%

5%

Overall, the city witnessed a fall in new launches –

South and West experience maximum dip in their share

North accounts for almost half of the launches and East also sees some growth

Micro-marketwise half yearly trend in share of launches

Central East North South West0%

10%

20%

30%

40%

50%

19%15%

35%

8%

22%

17% 17%

46%

2%

18%

H2 2015 H2 2016

While demand slackens in the city, North and East leads the share in sales

Affordable supply and proximity to the major employment hubs drive the demand in North

Micro-marketwise half yearly trend in share of sales

Central East North South West0%

5%

10%

15%

20%

25%

30%

35%

9%

30% 30%

14%

17%

9%

28% 30%

12%

22%

H2 2015 H2 2016

QTS holding steady since early 2016 -2.1 years to offload the unsold inventory

QTS trend

Jun-

14

Sep-14

Dec-1

4

Mar-15

Jun-

15

Sep-1

5

Dec-1

5

Mar-16

Jun-

16

Sep-1

6

Dec-16

4

5

6

7

8

9

10

7.0 7.0 7.3

8.3 8.4 8.2 8.7

8.3 8.5 8.5 8.6

No.

of Q

uart

ers

Unsold inventory at 37,840 units in 2016

Impact of Demonetisation

Ahmedabad hit hard - New launches plunge by 69% in Q4 2016 YoY; Sales decline by 43%

Quarterly trend of new launches and sales

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

6,296

2,725 2,210

2,781

6,262

1,800

3,595 3,895

4,228

4,581

4,000

1,200

6,011

4,460 4,074 3,945

4,251

3,500

4,175

4,901 4,449

4,107

4,600

2,800

Launches Sales

No.

of u

nits

Q4 revenue loss for both State exchequer and industry

Average # units sold in Q4 2014 & Q4 2015 4,423

# Units sold in Q4 2016 2,800

37% fall in sales

Notional REVENUE LOSS to real estate industry

INR 500 cr

State government notional LOSS ON STAMP DUTY

INR 20 cr

Key takeaways

Launches go downhill, sales weaken YoY in H2 2016

Affordable prices attracting buyers in its peripheral markets such as

New Ranip, Tragad, Chand Kheda and Motera

Uncertainty likely to continue for the next quarter

Reduction in home loan interest rates, RERA, GST and ‘possible’ tax benefits in the upcoming budget likely to bring in a ‘feel good factor’

among buyers

Download the complete report from the link below:bit.ly/IREH216-SS