The Gujarat government’s decision to cancel the further expansion plan of Gift City in Gandhinagar has left builders and investors in dismay. The move has led to a significant crash in land and house prices, with the market value of a Rs 1 crore flat now reduced to Rs 75–80 lakh around the proposed action area.
Gift City, India’s first financial technology centre, was set to expand to meet future needs. The government had planned to merge surrounding areas into Gift City, targeting the construction of enough housing to accommodate over 8 lakh people. However, in June, the expansion was halted due to allegations of irregularities in land deals and property sales affecting projects in the original Gift City area. The affected area has now been placed under the Gandhinagar Urban Development Authority (GUDA).
This decision has severely impacted those who invested in land and buildings around Gift City. Currently, 2-2.5 lakh people work in Gift City, and the number is expected to grow as more companies establish themselves there. To address future residential needs, the government had notified approximately 1,000 acres in the adjoining villages of Shahpur, Ratanpur, Lawarpur, and Pirojpur for new development. Following this announcement, land prices in these areas had surged to Rs 23-25 crore per plot from the earlier Rs 6-7 crore.
Real estate experts noted that land prices in villages around Gift City had already started rising before the government’s announcement. Two years ago, land was available at Rs 5-7 crore per bigha, which increased to Rs 23-25 crore. However, prices plummeted to Rs 11-12 crore after the expansion was cancelled. Currently, land prices are being discussed at Rs 13-14 crore, but there are no takers, leaving many builders with expensive, unsellable land.
According to Gandhinagar brokers, property prices dropped as soon as the new development was cancelled. Flats that were valued at Rs 1 crore a year or two ago are now worth Rs 75-80 lakh. Property prices in the area had reached Rs 6,000-6,200 per square foot but have now decreased to Rs 3,800-4,000 per sq ft in inner areas and Rs 4,000-4,500 per sq ft near the highway. Despite the price drop, demand remains low, resulting in a surplus of unsold houses. In contrast, property prices in the original Gift City have doubled over the past year.
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