PUNE: Pune plays a critical role in the real estate sector of Maharashtra and the country at large. It continues to witness good traction as the market is still relatively affordable with new launches helping maintain the momentum. The demand for residential projects has increased tremendously driven primarily by the end-user segment. Real estate developers see considerable growth opportunities in the residential segment as the annual requirement of houses in Pune is estimated to remain in the range of 45,000-55,000 per year over the next couple of years. It’s a win-win situation for buyers also, as real estate prices are expected to remain firm with low vacancy levels and steady absorption trends. Buyers are spoilt for choice in Pune because of the large number of upcoming projects in the metropolitan region as well as the micro markets.
The Pune Realty market has expanded by 20.30% from December 2012 (2,09,521 apartments) to June 2013 (2,52,054 apartments spread over 2273 projects) as against 12% in the previous 6 months. The period between January 2013 and June 2013 witnessed an infusion of 52,223 apartments & of the total stock 79.5% is currently sold out. Of these additions, 27,008 apartments were launched in 494 new projects and 25,215 units were added as new supply in existing projects. Even with substantial supply being added, the market continues to show remarkable stability in terms of sellout.
The market is in an expansion mode with more premium homes being launched. Larger apartments in more city centric and prime locations are selling at a higher price. These larger homes also come with higher specifications and amenities that further raise the prices. In fact the prices of the larger sized homes have increased at a rate greater than the lower sized homes which further reiterates the demand for “premium homes”. The depreciation of the Rupee in the recent past makes it attractive for NRIs to invest in India thereby providing developers an alternative customer base.
The Pune residential market continues to show resilience amidst a negative economic environment at a macro level. At a local level, the launch of more projects than ever before and the sellout ratio continues to be at the average market sell out indicates that the demand continues from home buyers. The price increases have also tapered off marginally with the reduction in inflation over the last 6 months.
It is interesting to note that there has been a consistent shift towards catering to the high end segment of the market, however, the shift is more in the 3 & 4 bedroom segment. The average rate across all micro markets put together is Rs. 4464 per sq. ft. Areas like Bakori, Vishrantwadi, Karve road etc. experienced the highest price appreciation. While Katraj, Talegaon, Undri and Aundh among others experienced the lowest price appreciation in the last 6 months. The top two areas with the maximum new supply are Wagholi with 3700 units and Chakan with 3243 units.
In conclusion, Pune has developed rapidly over the past decade and as such, the infrastructure development has kept reasonable pace with this growth. What augurs well for the city is a growing IT hub and big manufacturing base for the auto industry. Most importantly the market continues to be much more affordable than many parts of the country.