PUNE: Pune’s residential property market has maintained its momentum, even in a challenging economic environment. It is true that residential sales have slowed down even in Pune. However, it is also a fact that they have remained healthy enough to sustain the viability of the city’s real estate market. That is why Pune’s developers continue to launch fresh residential projects. The Gera Realty Report Pune, for the period July 2013 to December 2013, indicates an increase in supply through the launch of more than 41,600 units of which about 19,200 units were in new projects, while 22,398 were added by way of new phases in existing projects. Greater employment opportunity in the city really works to the advantage of Pune’s real estate industry.
Dhaval Ajmera, director, Ajmera Realty, says, “With every metropolitan city having its own distinctive features and with tremendous scope for real estate development, buying a property in a location that is well-connected and buoyed with an upcoming industrial hub, is apt not only for endusers but also for investors. Pune offers an eminently healthy rate of employment generation, especially from the IT/ITeS, manufacturing and automobile sectors, ensuring equilibrium in demand and purchasing ability.”
Kishor Pate, CMD, Amit Enterprises Housing, feels that “Thanks to the sustained viability of the Pune property market, it will not see a price correction. The excessive speculative investment activity which caused prices to rise faster than they should have in the previous years, has now been curbed. Pune’s developers are now actively discouraging mass sale of units to speculative investors so that the market retains its rationality. The investors, who remain, are operating from sufficiently wide investment horizons. Thus, they will hold on to their properties for at least 3-5 years before they put them in the resale market. In the interim period, they are content to earn very satisfactory rental incomes from their properties. Property investment which is conducted in such a manner does not cause wild price fluctuations and erratic supply patterns that speculative investment does.”
According to Rohit Gera, managing director, Gera Developments, over the last six months, the average market price has risen from an average of Rs 4464 per sq ft, up to Rs 4804 per sq ft, reflecting an increase of 7.66 per cent for the second half of 2013. “The average price, a year ago, was Rs 4211 per sq ft; the y-o-y increase from December 2012 to December 2013, has been 14.13 per cent.” Despite their proximity to each other, Mumbai and Pune are two very different markets. Mumbai’s legendary space crunch has made residential property there exorbitantly costly, driving more and more aspiring middle-income homebuyers to the outer fringes. Meanwhile, Mumbai continues to grapple with its infrastructure deadlock; prices in most areas have stagnated and there is a considerable pressure from the market to bring them down.
In contrast, Advitiya Sharma, partner, Housing.com, shares that “Pune is a rapidly growing real estate market and as the city expands outwards and more IT companies move into the area, bringing more people into the city, real estate values in Pune are going to keep increasing. Add Pune’s new infrastructure projects to the mix and it’s easy to see why this metro city is attractive to investors, more than other metros, where the real estate market is more or less saturated.”
Arvind Jain, managing director, Pride Group, Pune, seconds this. “Pune has retained its attractiveness for property investment. However, the city is reflecting a dynamic which is usually witnessed in all growing real estate markets – there is more growth potential in emerging locations than in long-established areas. Upcoming locations in Pune appreciate faster because their market viability is being enhanced with increasing accessibility and social and civic infrastructure. They attract more people since Pune’s growing population is moving into areas which are affordable,” he says.
Sanjay Bajaj, managing director – Pune, JLL India, is of the view that “The fact is that it is operating with a suitable budget and an investment horizon; zeroed in on the right location; identified the best entry point and invested in a size and configuration which is in demand in the location.”
Lastly, Anil Pharande, chairman, Pharande Spaces, points out that “The investment dynamics in Pune and the Pimpri-Chinchwad Municipal Corporation, are intact and thriving. Nevertheless, investors should focus on factors such as population growth, the supply and demand dynamics of a particular location and value-adding real estate market drivers such as infrastructure. When there is increasing demand for homes in a certain area, property prices go up.”