PUNE: It has indeed been an interesting year for Pune’s property market in 2013. At a time when the markets across the country were by and large subdued, Pune had been growing at a steady pace and even appeared on the luxury landscape during the year. There have been multiple demand drivers behind Pune’s growth during the year and it is generally believed that once the economic outlook in general is brighter, Pune may be witness to better appreciation than even the neighbouring Mumbai property market and this makes Pune’s real estate more attractive than many other markets across the country. If the Pune market has maintained its momentum in 2013 against financial odds, 2014 may be its year of glory.
What goes in favour of Pune property is its attractive pricing. The average property rate in Pune (including PCMC) is Rs 4600 per sq ft and around 250 to 300 projects get launched every 6 months, as per the data collated by Track2Realty, in the last three years. Given that there are roughly 2500 live projects in Pune, this corresponds to a 10 per cent addition in the stock. There is a lot of activity in the property market to suggest that developers are planning to launch more projects in the year ahead. This clearly would not have happened had there been a demand slowdown. So, Pune has bucked the slowdown during the year 2013.
In fact, the number of households in Pune has increased by 44.75 per cent (from 9,20,536 in 2001 to 13,32,493 in 2013, as per Census 2011), which is a good indicator of housing demand as households do not get formed unless supported by housing supply. Pune looks reasonably strong, heading into 2014, in terms of housing demand. Nearly, all the micro-markets in Pune are growing and the fringe areas are also poised to see a significant boost in housing supply and consequentially demand, since they are generally priced more affordable than the developed city centre areas.
Rohit Gera, managing director, Gera Developments, says that the big gain of the year 2013 is the demand for premium homes (homes priced at Rs 1 crore plus). Over the last few years, demand for larger homes has steadily climbed upwards and prices in markets like Baner have reached Rs 7,500 plus per sq ft. “As far as the losses of the year go, infrastructure in Pune is not in line with the housing demand. The local development bodies should invest more in creating the infrastructure that is required to support the housing stock being generated. We need to ensure a balanced development in the city which will help reduce the pressure on the local and civic infrastructure. A major loss for just not the local but national market, has been the lack of implementation and application of the various laws and reforms like the Real Estate Bill and EWS Plan,” says Gera.
Abhay Kumar, CMD of Grihpravesh Buildteck agrees that the significant gains are some very interesting launches which have attracted Mumbai’s posh crowd to the city.
The launches of many new hotels too, can be termed as gains for the city. The losses would be sluggish sales, over supply and funding problems for many reputed developers. “I don’t expect much from the Pune market in 2014. Instead, I see the realignment of demand-supply which would be a healthy sign for growth of the city. Some other sectors must also choose Pune as their destination, as IT alone cannot drive the city for a long time. If the Maharashtra government opts for Pune for its assembly sessions like Nagpur and Aurangabad, this city can see interest from more sectors which would reduce its skewed dependence on the IT sector,” points out Kumar.
Vinay Phadnis, CMD, Phadnis Properties, explains that there is a growing demand for properties by endusers. While property prices have remained stable over the past years, it is anticipated that there will be a marginal appreciation in the prices in 2014. With the recession affecting the economy since the last two years, things are shaping up for 2014, looking positive and here to stay.
“In the residential segment, the outskirts of Pune have the competitive price advantage. There has been a potential increase in the rates in the range of 25-30 per cent. There have been no losses as such in the year 2013; apart from the rising cost for the developers, be it land prices, manpower, technology, interest rates and so on. The increasing overheads do adversely affect the end-user also. With the introduction of the LBT, customers have to shell out more. Despite challenges, the real estate market is resilient and continues to grow,” opines Phadnis.
Analysts maintain that the industrial and IT growth will continue to be favourable for the real estate sector in Pune.
By and large, Pune is still an end-user driven market and hence, the location and pricing will remain the deciding factors for the customers in the year ahead. They believe that Pune will continue to see a steady demand and correspondingly, a steady increase in prices that are largely inflation led.
The market is expected to see an increase in prices in the range of 10-12 per cent for the calendar year of 2014. Some developers are also expecting to see renewed demand from NRIs as well as a demand from investors from Mumbai, on account of the affordability of homes in Pune as well as the stagnation of the Mumbai market.
It is expected that micromarkets like Bavdhan and Kharadi, among others, will see significant development. The city will continue to retain its old world charm and at the same time, evolve to be in a constant process of upgradation and reinvention.
Certain areas with limited land parcels will continue to see a price rise till the available stock is absorbed. This, in turn, will ensure the luxury market remains attractive.
In a nutshell, if 2013 has been an interesting year for Pune real estate, it is poised to take a giant leap in 2014.