Unsold Inventory Rises Sharply in Ahmedabad’s Core Areas

Ahmedabad, one of Gujarat’s most dynamic and steadily expanding real estate markets, is witnessing a major shift: unsold housing inventory in the city’s core urban pockets has risen sharply. Traditionally, areas such as Navrangpura, Paldi, CG Road, Satellite, Ellis Bridge, Ashram Road, and parts of SG Highway have been regarded as strongholds of consistent residential demand. However, recent market behaviour shows a growing backlog of completed and under-construction units that remain unsold for longer periods. This signals a structural shift in buyer preferences, price alignment, and the evolving urban expansion pattern of Gujarat.

This article explores the underlying reasons behind the surge in unsold properties in central Ahmedabad, the implications for stakeholders, the broader Gujarat context, and the possible way forward.

Understanding the Issue: What Is Unsold Inventory?

Unsold inventory refers to residential units that have been launched or completed but have not yet found buyers. It is typically measured in terms of:

• Total number of unsold units, and

• Quarters-to-sell (QTS) — the estimated time needed for the market to clear existing inventory at the current pace of sales.

In Ahmedabad’s core areas, both measures have shown upward movement. Despite historically stable demand, inventory in central neighbourhoods is now taking longer to sell, signalling an imbalance between supply and actual buyer absorption.

Why Are Ahmedabad’s Core Areas Facing Rising Unsold Inventory?

1. Shift of Buyer Preference Toward Peripheral Zones

Many homebuyers today prefer larger, value-for-money units available in Ahmedabad’s peripheral areas such as Bopal, Ghuma, Shela, Chandkheda, GIFT City peripheries, and parts of North Ahmedabad. These zones offer:

• Bigger homes for lower per-square-foot rates

• Better parking and open spaces

• Newly developed social infrastructure

As a result, central micro-markets — where land prices and construction costs are higher — witness slower absorption.

2. Higher Ticket Sizes in Core Locations

Projects in central Ahmedabad naturally command higher prices due to:

• Premium land valuation

• Dense infrastructure

• Proximity to business districts

However, with cautious consumer spending and rising home loan interest rates, many buyers delay or avoid investments in costly core-area apartments. This widens the gap between supply and demand.

3. Redevelopment Pressures and Market Disruption

Core Ahmedabad has seen an increase in redevelopment projects, especially in older societies and buildings. Redevelopment often temporarily displaces residents and disrupts existing market demand. New redevelopment stock is usually priced higher, which reduces affordability for original residents and everyday buyers, leading to slower sales.

4. Overestimation of Demand by Developers

In some cases, developers launched projects anticipating steady demand based on historical data. However, changing buyer dynamics, lifestyle preferences, and affordability concerns have led to over-supply in certain locations.

5. Delay in Project Completion or Handover

Delays — whether due to compliance issues, construction challenges, or financial constraints — erode buyer confidence. Many buyers now prefer ready possession or near-complete projects, leaving slow-moving or stalled inventory unsold for extended periods.

The Broader Gujarat Context

The problem of rising unsold inventory isn’t entirely limited to Ahmedabad. Across multiple Gujarat cities — including Vadodara, Surat, Rajkot, and Gandhinagar — developers have accelerated supply in anticipation of continued economic growth, migration, and urbanisation. However:

• Affordable housing sells faster,

• Premium and mid-segment housing sees slower movement,

• Peripheral zones show better absorption,

• Core city pockets face stagnation.

Ahmedabad, being Gujarat’s largest real estate market, reflects this trend most prominently.

Implications of Rising Unsold Inventory

1. Impact on Developers

Developers face higher carrying costs as unsold stock accumulates. This includes:

• Maintenance and security of unsold units

• Repayment obligations

• Reduced liquidity for new projects

Some developers may resort to price corrections, festival offers, or flexible payment plans to attract buyers.

2. Opportunities for Homebuyers

For buyers, rising unsold inventory can translate into:

• Better negotiation power

• Attractive discounts and schemes

• A wider selection of ready units

However, buyers must remain cautious by verifying project documentation, RERA status, and builder track records.

3. Market Saturation in Specific Micro-Markets

Core areas risk short-term saturation if supply continues to outpace genuine demand. Without corrective action, this may lead to:

• Stagnant prices,

• Limited new launches,

• Slower investment returns for property investors.

4. Government and Policy Implications

Rising inventory may prompt policymakers to:

• Encourage affordable supply in central areas,

• Strengthen redevelopment regulations,

• Promote rental housing models,

• Ensure faster approvals and better compliance through Gujarat RERA.

Strategic intervention can help rebalance demand and supply flows.

Key Factors Re-Shaping Residential Demand in Ahmedabad

1. Improved Connectivity to Peripheral Regions

Ahmedabad’s expanding road network, upcoming metro routes, and better access to commercial clusters have made peripheral zones more attractive. Modern amenities and integrated townships further shift demand outward.

2. Growing Preference for Modern Amenities

Peripheral projects often include:

• Clubhouses

• Larger parks

• Swimming pools

• Smart-home features

These amenities are harder to incorporate in dense core zones.

3. Rise of Mixed-Use and Commercial Hubs

Areas like SG Highway, Thaltej, and GIFT City attract office spaces and professionals, drawing residential demand outward and impacting the traditional central neighbourhoods.

4. Affordability as a Deciding Factor

Even upwardly mobile families are price-sensitive today. Affordable and mid-segment projects see far quicker sales than premium inner-city ones.

The Path Forward: What Needs to Be Done?

1. Developers Should Realign Product Strategy

Developers may need to:

• Reduce unit sizes

• Reassess pricing strategies

• Introduce practical amenities

• Adopt flexible financing schemes

Aligning products with buyer affordability can boost sales.

2. Promote Rental Housing Solutions

Unsold units can be temporarily converted into:

• Rental housing

• Student accommodation

• Corporate leasing

• Co-living spaces

This generates cash flow and reduces supply pressure.

3. Strengthening Redevelopment Policies

Streamlining redevelopment approvals and ensuring transparent processes can revive central areas while preventing inflated pricing on new units.

4. Enhancing Buyer Confidence

Ensuring timely completion, transparent RERA compliance, and quality construction are essential for restoring momentum in slow-moving micro-markets.

Conclusion

The rise in unsold inventory in Ahmedabad’s core areas reflects an evolving real estate landscape shaped by affordability, changing buyer expectations, and shifting urban expansion. While the trend presents challenges for developers, it also opens opportunities for buyers and policymakers to create more balanced, sustainable urban growth. With thoughtful interventions and a renewed focus on affordability and delivery, Ahmedabad — and Gujarat as a whole — can achieve a more stable real estate environment that meets the needs of its rapidly urbanising population.

In case of any query regarding Unsold Inventory Rises Sharply in Ahmedabad’s Core Areas, Feel free to connect with our legal experts, Tulja Legal, at +91 96380-69905

About the Author

Anju S Nair

Legal Researcher | LLB, MA English| Corporate Lawyer | Business Enthusiast | Founder & CEO at iLawbook.

FAQs

1. Why is unsold inventory rising in central Ahmedabad?
Because buyers increasingly prefer larger, more affordable homes in peripheral areas, and core-area prices are often higher.

2. Which areas in Ahmedabad have the most unsold stock?
Navrangpura, Paldi, Satellite, Ellis Bridge, CG Road, and central SG Highway pockets show higher unsold inventory.

3. Does rising unsold inventory mean property prices will fall?
Not necessarily. Developers may offer discounts or schemes, but large-scale price crashes are unlikely.

4. Are peripheral areas performing better?
Yes. Areas like Bopal, Shela, Ghuma, and Chandkheda show better absorption due to affordability and modern infrastructure.

5. How does redevelopment affect inventory?
Redevelopment adds premium supply that may not match local affordability, leading to slower sales.

6. Is this trend unique to Ahmedabad?
No. Similar patterns exist in several urban markets across Gujarat.

7. What does rising inventory mean for buyers?
More options, better deals, and stronger bargaining power.

8. How can developers reduce unsold stock?
By reworking pricing, modifying unit sizes, and offering flexible payment plans.

9. What role does Gujarat RERA play?
It enhances transparency and buyer confidence, helping improve sales velocity over time.

10. Will the market stabilise soon?
Stability may return within 1–3 years depending on demand, project completion, and economic conditions.

References

1. Ahmedabad Real Estate Market Reports – ANAROCK

2. India Real Estate Residential Reports – Knight Frank

3. Gujarat RERA Official Reports

4. Local News Sources on Ahmedabad Real Estate Trends

5. Real Estate Market Analyses by Housing and Industry Platforms