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Ahmedabad Real Estate Bubble

In a normal market scenario, the property prices will rise gradually in tandem with the rate of inflation. But when the cost of properties rises unrealistically fast, the real estate bubble is created. Real estate bubble develops due to rise in demand for irrationally priced properties. Once this demand drops sufficiently, the bubble bursts and property prices will crash down.

According to a recent real estate report, the real estate prices in Ahmedabad have seen an upward trend in the past few months. The prices of Ahmedabad properties have been doubled since 2010. The property market in the city which had been considerably hit by an economic slowdown in year 2009 saw a steady rise in 2010. The high economic growth, rate of urbanization and the infrastructural development in the city were the main catalysts attributing to this growth of the Ahmedabad real estate market. The rising real estate prices in the city are giving a good scope for the real estate investors who are now willing to cash into Ahmedabad market to earn good returns from their investments. But for the ordinary or average income property buyers property investment seems out of access in the present trend of price hike. Today there is a two times increase in Ahmedabad property rates and it seems as if Ahmedabad real estate is bubbling. There are several reasons for this Ahmedabad real estate bubble which is slowly developing in the city quite some time from now.

The main reason is however the return of NRG investments in the city. With the liberation in FDI policies NRI Techies who want to return to Gujarat are now pouring in lots of money into Ahmedabad real estate to buy properties. This is creating an artificial demand for properties which has been firing the prices. The next big reason to support the price hike in the city is the saturation in other metros. All the other metropolitan cities like Delhi and Mumbai are either saturated or on the verge of real estate saturation. Therefore the next big destination for real estate developments and investment in India are the tier 2 cities among which Ahmedabad is the most prominent. Today Ahmedabad ranks above all the other tier II cities in India in terms of infrastructure, education, healthcare and industrial developments, law and order and cosmopolitan society. Because of this major of real estate activities are being shifted from other metros to Ahmedabad city. Influx of industries in nearby areas of the city like Sanand is also a major reason for this real estate price rise. Apart from automobile companies, several other firms or multinational companies like Bosch, Hitachi Hi-Rel Electronics, Colgate Palmolive, Hyundai Transformers and AIA Engineering are now looking to buying land for their respective businesses. Therefore the land prices even in nearby areas of the city have hit high now. Added to this Government of Gujarat is also launching projects which will generate more employment in the city. This is going to generate rapid increase in demand for housing in the city. Considering all these factors it looks as for quite some time in the near future the property prices will continue to hit high in Ahmedabad and the Ahmedabad real estate bubble will sustain for quite long time until price correction takes place by the drop in demand for irrationally priced properties.

This real estate bubble is making difficult for average income property buyers to possess properties in Ahmedabad. However there are some real estate developers in Ahmedabad who are offering properties at comparatively affordable rates. Buying properties from them will be good choice for these property buyers who want to invest in property in Ahmedabad in spite of this price hike. Pacifica is one such real estate developer. So come invest in properties of Pacifica to get the benefits of affordable pricing and quality.

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