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In 1990, Pune started emerging as IT/ITES companies’ destination. In recent years, the effect of IT revolution is improving Pune residential real estate market tremendously. Lots of unregulated developments are seen in the market and the property prices have boosted unrealistically. The growth of IT coupled with the enormous extent of organized retail and the city’s changing demographics have fuelled the developments a lot. The last factor has a more impact on Pune property market both in terms of size and type of property.
With the increase in population, the town planning commission is faced with new challenges. The availability of land for development results the expansion and development of peripheral localities. The real estate demand in Pune was mainly driven largely by workers of the services industry.
Home in a suitable budget:
The recent trend of purchasing is saving a sizeable amount and buying a home in suitable budget. Due to this, the developers are currently, concentrating on building properties that cater to the basic requirements. The IT professionals are showing interest to buy homes in less expensive areas and people working in industries prefer these localities to stay close to their work places.
Slower price rise:
The price rise in Pune has slowed down considerably last year, comparing to the one before that June 2013-June 2014 the price rise was 10.3% where as it decreased to 3.33% in June 2014-June 2015. Sources say the reason for this decline is because of the large inventory of houses and real estate that has increased from 245,639 homes over 2761 projects 12 months ago to 280,913 homes across 3067 projects.
Declining half year growth rate:
The half year growth rate has declined from 3.04% in June 2014-December 2014 to a meagre .27% in January 2015-June 2015. This decline is again attributed to the huge inventory available.
Increase in real estate inventory:
Reports rate that the real estate inventory has increased another 14.36 % in the past 12 months. There has been a net addition of 35,324 homes across 306 additional projects. This impact of increased purchase options for a reduced set of customers has led developers to see a double impact in terms of individual project sales.
Unsold Stock:
Since the real estate is in an all time low, the unsold inventory has jumped steeply to 36.85%. The budget category has seen an increase of 125% from 18019 unsold units to 40814 unsold units. The next highest increase is the Value category with an increase of 75 % from 14184 units to 24768 units. The luxury segment has the next highest increase in unsold inventory at 65 % from 2629 units unsold rising to 4325 units. The Premium and Premium plus category have relatively low increases at 30 % & 22 % respectively.
The current trends in properties in Pune indicate that unless something drastic is done to bring down input costs (cost of land, cost of approvals, time of approvals, material costs), the prices will not see any significant correction in the coming years.
