Right time for end-users to invest in Rajkot!
Two years ago, the real estate market of Rajkot entered a growth track. With high rate of migration from nearby cities, several localities recorded a significant capital appreciation. To further change the skyline of the city, Rajkot Municipal Corporation (RMC) announced a 25 per cent increase in the Floor Space Index. Soon this announcement turned into a reality. And in order to develop Rajkot on the lines of Ahmedabad and Surat, the FSI was increased from 2.0 to 2.5. All this would have made Rajkot a prominent realty destination just next to Surat and Ahmedabad. But did this actually happen? Let’s find out.
Rajkot, the fourth largest city in Gujarat and the largest in Saurashtra region is known for its SMEs such as light engineering, automobile parts, brass parts and foundries. There are more than 500 foundry units in this region that hosts a lot of small scale manufacturing units such as diesel engines, bearings, kitchen knives, and other cutting appliances, watch parts, forging industry, casting industry etc.
However, since last one year the property market has been stagnant. In some of the localities sales have gone down by almost 50 per cent in the last 4-6 months. So, what are the reasons for this? Well, Atul N Rachh, joint secretary of Real Estate Agents Association of Rajkot (REAAR) laments, “as people prefer to stay within the city, the property values in the key precincts of Rajkot have gone overboard. In some localities, capital values have recorded a whopping increase of about 15-25 per cent.” With demand mainly skewed towards the city centre, the property values in the outskirts have recorded a dip and a price correction of about 30-40 per cent over the last 4-6 months.
So does this mean that one should not consider Rajkot for property buying? The answer is No. Rajkot realty market is largely driven by the business class. “At least 80 per cent of the buyers in Rajkot are businessmen who have a good buying capacity. Though, the market is going through a lull right now, it is expected to bounce back in two to three years,” informs Shekhar Y Mehta, Member, NAR Committee, Rajkot & Proprietor, Sonali Developers. Denizens also expect price correction in the property values in the coming years.
Owing to subdued market sentiments, currently investors are keeping themselves away from taking a plunge in the market. However, with reduced investor activity this is an ideal situation for the end-users to enter Rajkot’s market. There is ample availability of ready-to-occupy property in the market.
Few developers active in the city include Sanskara Conbuild Pvt Ltd, Swathi Infratech, Ladani Group, Acon Corporation, JHP Developers, to name a few. These projects offer varied configuration ranging from 2-5 BHK units. For the new launches, the starting price is Rs 15 lakh which goes up to Rs 3 crore.
Where to buy?
Affordable to Mid-range: Kalavad Road, Jamnagar Road and areas beyond 150 Ring Road have various projects comprising mainly 1 or 2BHK units, which are priced anywhere between Rs 15 to Rs 30 lakhs.
Upper Mid to Ultra-luxury segments: Kalavad Road is known to house all big projects catering to these segments. Property prices for 3BHK or more in this locality are mainly priced between Rs 1 crore to Rs 5 crores. This niche segment is largely driven by businessmen, NRIs and HNIs.
Even the luxury segment has gone to the next level altogether. Latching on to the demand from moneyed class, builders in Saurashtra’s commercial hub have now started constructing what they call ‘multi-storeyed bungalows’. Interestingly, residents in these lavish apartments can take their cars right up to their 10th floor apartment and park it next to the living room.
Though one may not be able to garner returns equivalent to cities such as Ahmedabad and Surat, but still Rajkot seems to be a potential options for buyers with a long term investment horizon.
