Buying a Flat in Pune, a View on Current Residential Market by Experts
Recent reports have suggested that residential market prices in Pune are unlikely to see any major correction in the next 1 year. This may come as a disappointment to those who are planning to buy a flat in Pune, but waiting for the prices to drop further.
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 hardly any marginal drop in investment returns – capital value appreciation.”
The ‘sweet spot’ for buyers in the mid-segment that 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 residential properties on the western corridor, including Aundh, Baner, Balewadi, Bavdhan, Hinjewadi and Wakad 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 residential buyers waiting for the prices to go down are waiting in vain.
“However, they would definitely be able to negotiate the prices in the present scenario, depending on the current inventory levels with the developer and the location of a residential project,” he said.
Another report by Knight Frank Research on India Real Estate in 2014 stated that lesser number of new project launches helped Pune avert any depreciation in prices which on the contrary helped prices to rise by 5% across the city.
“The real estate 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 Pune. “Being an industrial hub, Pune 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 real estate prices here,” they added.
Sanjay Dutt an executive managing director for South Asia at property consultant Cushman and Wakefield, said, “Although the percentage of people investing in Pune property 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 1 or 2 years.”
To enhance sales, builders have launched new schemes which require the customer to pay up to 20% of the total amount while booking and the rest after possession, he said, adding that these schemes were not available in Pune earlier.
Maximum appreciation is expected in Hinjewadi, Kharadi and nearby areas due to employment opportunities (mostly IT/ITes) as well as office stock coming up, says JLL report
The buyer trend, that has been observed for the Pune has been that there is a keen interest in the prelaunch stage due to low prices and in general township projects are being preferred by new home buyers.