PUNE: IT driven locations, across the country, have been witness to the migration of large educated workforce, be it Bengaluru, Gurgaon or Pune. This upwardly mobile, well-earning and lifestyle-driven class, hence, becomes a key demand driver for property in the given city. In Pune, the expat Indians have thus, emerged as the key demand drivers for property. The rise and growth of Pune, in terms of its overall economics, also suggests that the large workforce will have a major share in creating demand. Primary drivers in Pune are the migrants from sectors like IT, automobile, education, other manufacturing sectors, which have led to the growth of the city’s economy. Better supply itself is pushing the demand from the urban buyer while in the past, the good climate all through the year, had made this city the pensioners’ paradise.
People from different walks of life are settling down in Pune and analysts often assert that they can no longer be termed as expats because they are willing to settle down in the city. However, the demography of the city is changing fast and with the educated workforce migrating to Pune, it has fast turned into a cosmopolitan place and the local crowd is fast becoming more dependent on the migrant population. Abhay Kumar, CMD of Grihpravesh Buildteck, points out that IT still rules the roost in Pune but there are other drivers too, for the real estate growth in the city. The improved connectivity between Pune-Ahmednagar-Aurangabad is driving the Raanjangaon belt on one side, while the news of the Navi Mumbai Airport has created remarkable interest in the Mumbai-Pune Expressway area too.
Pune also has the natural advantage of location that allows it to grow from all sides. Lavassa road area, Pirangut, Paud, etc., too, have witnessed some encouraging developments. “Primarily yes, the expat Indians are the main demand drivers in Pune. The quality of development too, has been due to such demands where the customers are well-travelled and earn well. One can observe the development of hotels, recreational joints, malls, etc., being the main driver for such growth which has been mainly due to the latent demand of the expats,” says Kumar.
Rohit Gera, managing director, Gera Developments, shares that Pune has had four key sectors driving its growth – IT, manufacturing, education and auto. Currently, the IT and ITeS industries are the major demand drivers of the Pune property market. In several projects, there has been a very high percentage of IT and ITeS employees, which is representative of the overall industry. The other complementary driver is the demand seen by people from Mumbai. “Due to the high cost of real estate in Mumbai, Pune becomes a far more affordable investment option, especially in the range of Rs 50-150 lakhs range. The NRI population is also contributing significantly to this growth. It is important to note that properties in the Rs 35-40 lakhs bracket, have also seen a lot of interest from the manufacturing sector. However, most of the supply for this product range, is on the outskirts of Pune in areas like Talegaon and Chakan. Since Pune is an industrial and IT hub, it has a large immigrant population (about 30 per cent). All these factors, along with world-class educational institutions and the auto industry, have given Pune’s property market, a stable and sustainable demand for homes,” explains Gera.
Vinay Phadnis, CMD, Phadnis Properties, however, does not agree that the increased economic activity and that urbanisation will lead to more migration and hence, the local economy will be more dependent on the expat population. The local economy cannot be completely dependent on the expat population. There will always be a fair market share of NRIs and locals investing in real estate. Another important aspect playing an important role is the MNCs investing in commercial property. About 1.2-1.5 lakh people migrating to Pune in a year for the purpose of education and employment, is the target market.
“Due to competitive property prices, Pune becomes a rational and desirable choice for property buyers. A huge chunk of investors from the metros, are choosing to invest in Pune because of the price advantage and higher returns. There is a considerable balance in the number of budget flats for the mid-income group as well as in the luxury segment. Mid-income buyers are motivated by affordability and convenience, in terms of basic amenities, value-for-money, location, proximity, social infrastructure and so on. Due to a rise in the number of professionals, mainly from the IT and manufacturing sector, the demand for houses, mostly in the price bracket of Rs 50 lakhs to 1 crore, has been constant,” shares Phadnis.
A growing number of HNIs have contributed to the growth in luxury apartments. Investors are looking at the present situation as a buying opportunity. Infrastructure and urbanisation also play a vital role in the decision making process of selecting residential properties, as new projects which are closer to developed areas and have a growing infrastructure, will lead to greater appreciation value in future. There is also a huge rise in the demand for commercial spaces in leasing as well as outright sale agreement. There is indeed a large segment of NRIs investing in tier-II cities like Pune. Appreciating foreign currency rates in 2013 had actually increased the demand from NRIs who were investing in properties in the city.
As a matter of fact, some of the luxury projects in Pune got a huge response from the NRI buyers. This is due to the fact that the urban environment is offering citizens from rural pockets, better opportunities and a better livelihood. With Pune being a magnet for such a migrant workforce, the property market in the city has benefitted from the same in the last few years. This has also propelled more companies to set up businesses here and it is certainly expected that the number of expats employed, will increase proportionately in times to come. Hence, the ratio of expat Indians in the Pune property market is only set to grow.