PUNE: Recent reports have suggested that residential property prices in the city are unlikely to see any major correction in the next one year. This may come as a disappointment to those planning to buy a house, but waiting for the prices to drop.
A Jones Lang Lasalle (JLL) India Residential Realty report stated, "Unlike in Delhi-NCR, where residential real estate prices saw a massive drop during the last two years, Pune has maintained its status as a safe property investment destination with just a marginal drop in investment returns - capital value appreciation."
The 'sweet spot' for buyers in the mid-segment lies between Rs 4,500 and Rs 5,200 per square feet, the report stated, adding that while there has been an increased interest in the properties on the western corridor, including Aundh, Baner, Balewadi, Bavdhan and Hinjewadi, the sales went down once a price level of Rs 5,500 per sq ft was reached.
Sanjay Bajaj, managing director, Pune, JLL India, said those waiting for the prices to go down are waiting in vain.
"However, they would definitely be able to negotiate the prices in the current scenario, depending on the inventory levels with the developer and the location of a project," he said.
Another report by Knight Frank Research on India Real Estate in 2014 stated that lesser number of new launches helped the city avert any depreciation in prices which, on the contrary, rose by 5% across the city.
"The slowdown rate in Pune has been lesser when compared to other cities. It is still one of the best markets to invest in, after Bangalore," said Shantanu Mazumder, director of Knight Frank India, Pune branch. While no increase or decrease is expected in the next 12 months, an improvement in sales is expected, he added.
Experts have attributed the rise in prices to continuous migration of people from other states to the city. "Being an industrial hub, the city witnesses a lot of people coming here for better career opportunities. This migratory population could be attributed to the rise in demand which eventually pushes up the realty prices here," they added.
Sanjay Dutt, executive managing director for South Asia at property consultant Cushman and Wakefield, said, "Although the percentage of people investing in Pune residential market is not as much as in Delhi or Mumbai, and there are more end-users here. Also, while there has been a drastic increase in prices in Pune since last 10 years, the increase has been marginal in the last one or two years."
To enhance sales, developers have launched new schemes which require the customer to pay up to 30% of the total amount while booking and the rest after possession, he said, adding that these schemes were not available in the city earlier.