Registration of New Real Estate Projects in Gujarat Almost Back to Pre-Lockdown Levels

After a period of stagnancy in the Indian real estate sector during the COVID-19 pandemic, the industry is starting to pick up pace again. Apart from a rise in sales, this is also evident from an increase in the number of new project launches. In Gujarat, the number of new launches has risen back almost to its pre-lockdown level.

The registration of real estate projects had dropped to negligible levels from the beginning of the lockdown till June. Before the lockdown, the number of registrations per month used to range between 150 and 180 on an average. July and August witnessed the registration of 130 and 150 projects respectively.  This is a clear indicator of the quick revival of construction activities in the sector.

About 48% of these projects are residential, thus forming a majority of the total number of registered projects. These are followed by mixed-use developments, which form the next 32%. It might be noted that an increasing number of builders are coming up with mixed use developments as many homebuyers are looking for homes with shopping and entertainment amenities within a walking distance. The commercial projects constitute another 19%, while only 1% of the new launches are plotting schemes.

The real estate sector in Gujarat has been facing issues lately, due to declining investments. For example, around INR 86663 crore of investments were officially recorded by GUJRERA in fiscal year 2017-18. This fell to INR 72,184 in the next fiscal year, i.e., 2018 to 2019. The last fiscal year, 2019 to 2020 saw a major decline as the total investment in the real estate sector in Gujarat decreased to INR 44,773 crore. According to experts, the ongoing fiscal year would prove to be even more devastating for the developers. This is because April, May and June witnessed almost zero new project launches.

Although the number of new launches in Gujarat has been rising since July, the developers are facing liquidity problems. However, this situation is expected to improve in the coming months as sales are picking up. In several of the other states, property sales have been reviving at a healthy rate. With the lockdown getting relaxed, more and more fence-sitters and homebuyers who had postponed their plans during the lockdown now rushing to buy homes.

The establishment of the Gujarat Real Estate Regulation and Development Authority (GUJRERA) has evidently been a positive move. The authority has been tracking the trends in the sector constantly, thus providing valuable insights for developers and buyers alike. Moreover, GUJRERA has fostered transparency in the industry, boosting the sentiment among buyers.