Real estate sector in Gujarat is faced with turbulent times.
A recent study conducted by the trade body, Associated Chambers of Commerce and Industry of India (Assocham), noted that outstanding investments attracted by the real estate sector in Gujarat have dropped 20 per cent from over Rs 2.37 lakh crore as of September 30, 2012 to about Rs 1.9 lakh crore as of September 30, 2013.
Similarly, outstanding investments attracted by the realty sector across top 20 States dipped 6 per cent from over Rs 15.39 lakh crore to about Rs 14.51 lakh crore.
“The real estate sector suffered grave turbulence in 2013 due to plethora of reasons like rampant economic slowdown both globally and domestically, liquidity crunch, unstable currency, high input costs, labour shortage, high interest rates and growing inflation,” according to a comprehensive analysis titled ‘Real Estate Sector: Outlook for 2014’ conducted by Assocham.
The study also revealed that in Gujarat, inflow of investments had declined about 5 per cent from over Rs 2.49 lakh crore as of September 30, 2011 to Rs 2.37 lakh crore as of September 30, 2012.
Outstanding investments across the country had increased marginally by about 2 per cent from about Rs 15.1 lakh crore as of September 30, 2011 to Rs 15.3 lakh crore as of September 30, 2012.
According to the study, about 63 per cent of the total outstanding investments in the State were under implementation as of September, while nationally it was over 68 per cent.
Even the share of Gujarat in outstanding real estate investments has come down from over 15.39 per cent to about 13 per cent.
Maharashtra topped the list by having the highest share of about 20 per cent followed by Gujarat (13 per cent), Haryana (11.2 per cent), Karnataka (11.1 per cent), Uttar Pradesh (9.8 per cent) and Andhra Pradesh (9.6 per cent).
In its forecast for 2014, Assocham maintained that there seems to be no respite in the offing for India’s real estate sector at least during the first half of the calendar year 2014.
“The situation on real estate front is not likely to improve much owing to an uncertain political scenario at least during the first six months due to forthcoming general elections and poor investor, end-user confidence due to sluggish economic growth coupled with continued high property prices,” Assocham said.