Ahmedabad vs Surat: Which City Offers Better Real Estate Investment Returns?

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  By Gujju Ticks

  16 May, 2025

Gujarat, a state renowned for its quick urbanisation and industrialisation, offers real estate investors rich prospects. Ahmedabad and Surat are two of its most well-known cities and are important hubs that draw both foreign and domestic investors. In order to ascertain which city provides superior investment returns, this article compares the real estate markets in Ahmedabad and Surat.

Economic and Infrastructure Overview

Ahmedabad: A Blend of Tradition and Modernity

Over the past ten years, Gujarat's largest city, Ahmedabad, has seen tremendous economic growth. The city is a good place to invest in real estate because of its advantageous location and strong infrastructure. The Ahmedabad Metro Rail, the Ahmedabad–Dholera Motorway, and the Dholera Special Investment Region (DSIR), which is positioned to grow into a significant industrial centre, are examples of important infrastructure developments.

The city's attractiveness to investors is further increased by its inclusion in the Delhi-Mumbai Industrial Corridor (DMIC). Ahmedabad's status as a Smart City has also resulted in advancements in public services, transport, and urban planning.

Surat: The Diamond City's Ascendancy

One of India's fastest-growing cities is Surat, which is well-known throughout the world for its textile and diamond industries. Significant infrastructure projects like the Surat Metro Rail, the Surat Diamond Bourse, the largest office building in the world, and the Diamond Research and Mercantile City (DREAM City) add to the city's economic strength.

Improvements in digital governance, environmental sustainability, and urban mobility have resulted from Surat's inclusion in the Smart Cities Mission. All of these changes have improved Surat's real estate prospects.

Property Prices and Appreciation

Ahmedabad: Steady Growth with High Potential

The real estate market in Ahmedabad has been steadily expanding. The city's average property price as of mid-2024 was about ₹5,925 per square foot, up 49% over the previous six years and 16% in 2023 alone.

Because of their closeness to business hubs and infrastructure advancements, prime locations like SG Highway, Thaltej, and Prahlad Nagar have experienced significant appreciation.

Surat: Competitive Pricing with Emerging Opportunities

With an average price of ₹1.37 crores, depending on the type of property and the locality, Surat's real estate market offers competitive pricing. Demand has surged as a result of the city's rapid urbanisation and infrastructure projects, especially in the vicinity of DREAM City and the future metro corridors.

There are still opportunities for investors looking for long-term gains in some localities, even though others have seen substantial appreciation.

Rental Yields and Income Potential

Ahmedabad: Attractive Returns for Investors

Ahmedabad provides good rental returns, particularly in areas with high demand. Monthly rents for 3BHK apartments in areas like Satellite and Prahlad Nagar can reach ₹42,500, while rental yields for 2BHK and 3BHK properties range from 2.5% to 4%.

Due to its status as a centre of industry and education, the city's expanding population guarantees a steady demand for rental properties.

Surat: Stable Yields with Growth Potential

The rental yields in Surat are marginally lower; 2BHK properties yield 2.5% to 2.7%, while 3BHK properties yield 2.8% to 3%. However, it is anticipated that the city's growing industrial base and infrastructure improvements will increase demand for rental space, which could eventually result in higher yields.

Investment Hotspots

Ahmedabad's Prominent Localities

• SG Highway: a fast-growing corridor with residential and commercial developments.

• Thaltej: renowned for being close to business areas and offering high-end housing options.

• Prahlad Nagar: a reputable neighbourhood with strong facilities and infrastructure.

• GIFT City: India's first working smart city and global hub for financial services, drawing large investments.

Surat's Emerging Areas

• DREAM City: An emerging business district with the potential to grow into a significant commercial centre.

• Varachha and Sarthana: The future metro connectivity will benefit localities.

• Piplod and Vesu: Demand is rising in residential areas as a result of infrastructure improvements.

Conclusion: Ahmedabad vs Surat – Making the Investment Choice

For real estate investors, Ahmedabad and Surat both offer attractive prospects. A more developed market with steady growth, greater rental yields, and a more varied economy can be found in Ahmedabad. Its strategic initiatives, such as GIFT City, and improvements in infrastructure make it a more attractive place to invest.

Conversely, Surat is a developing market with substantial room for expansion. It is a desirable alternative for investors looking for long-term gains because of its quick industrialisation, infrastructure projects, and advantageous location.

In the end, an investor's risk tolerance, investment horizon, and particular goals will determine whether they choose Ahmedabad or Surat. Ahmedabad is a wise option for investors looking for steady profits and a reputable market. On the other hand, Surat's real estate market might be attractive to investors looking to profit from a growing market.

Note: All figures and data are derived from reports and data that were accessible as of the middle of 2024. Before making an investment, investors are encouraged to speak with real estate experts and perform extensive due diligence.