Why Invest in a New Home in Pune
Growth in property prices in Pune is expected to be positive as it continues to be an IT,
education and manufacturing hub, which will offer significant employment opportunities
and keep the end user demand ticking in this city. Flats in Pune have witnessed a reduction in the configuration sizes, to match the budget of end-users.
Pune real estate market witnesses an end user to investor ratio of 60:40. The market sees
a considerable demand from Mumbai, NRI’s and buyers from cities nearby Pune such as
Ahmednagar, Nashik, Kolhapur, Solapur, Satara and Karad.
East and West Pune continue to be the investor favorite destinations. East Pune is being
driven by a mix of BFSI, IT and BPO industries in Kharadi, Viman Nagar, Magarpatta Cyber
City and Kalyani Nagar and manufacturing hub of Ranjangaon, while West Pune is being
largely driven by the demand emerging from the IT hub and SEZ’s concentrated in
Developers have increasingly started tapping the investor demand from NRI buyers and
are running road shows and marketing campaigns in countries like Singapore, Australia,
Hong Kong, Middle East and as far as the United States. Developers are exploring
innovative digital marketing platforms such as designing apps while also focusing on their
product strategy to offer right-sized and right-priced products.
The government has taken numerous initiatives with respect to infrastructure
development to decongest Pune traffic and provide easy accessibility to various areas and
cities. Plans are underway for construction of Pune’s Ring Road, Pune Metro, new airport,
numerous subways and flyovers.
Overall, the sector is expected to register a positive growth over the long run driven by
favorable reforms by the new single majority government at the Center and commercial
growth potential of this city into an IT, education, automobile and manufacturing hub.
Pune is also among the greenest urban areas in the country with more than 40 per cent of its area under green cover.
Known as the ‘Oxford of the East’, Pune is home to a large number of well-known educational
institutes, among them are the prestigious Pune University with its affiliated colleges such as
Fergusson College and College of Engineering. In recent years several deemed universities have
also come up, and the number of colleges continues to grow. The SNDT University for Women
was established in 1916. The Bhandarkar Oriental Research Institute, established in 1917, is now
famous for its research on the Prakrit and Sanskrit languages; over 20,000 ancient manuscripts
are housed at this institute. In the latter half of the 20th century, the National Defence Academy
and the National Chemical Laboratory were established in the city.
Over the years, the automobile industry has gained prominence in Pune, giving it the title of the
`Detroit of India’. Among the automobile companies that operate in Pune are Bajaj Auto, Tata
Motors, Daimler Chrysler (Mercedes Benz), Kinetic Engineering and Force Motors Ltd. In addition
the city witnesses a dominant presence of IT and software companies, primarily operating in
As Pune is emerging as an IT hub, most of the working crowd is predominantly in the age group
of 25 – 35 years. 1BHK and 2 BHK options are being preferred by working professionals supported by the double family income of the husband and wife employed in these IT-BPO companies; thus making this
Pune continues to appeal as a weekend getaway for Mumbaikars’ too owing to the pleasant climate
Pune scores over Mumbai, as the climate in the former is more pleasant, as it is situated on the
leeward side of the Western Ghats. The climate in Mumbai is humid throughout the year, as it
rests in the tropical zone and is closer to the sea. Owing to the above two factors, Pune has
famously become a `weekend getaway’ for Mumbaikars’ who want to retire over the weekend in
spacious homes and enjoy a cool, pleasant climate. Moreover, Pune is just 3 – 4 hour drive away
from Mumbai and is connected by the NH 4 highway.
Many developers are taking a note of this trend and introducing projects at the foothills, in
vicinity of a forest land and natural water bodies.
Apartments in Pune continue to be more spacious in comparison to Mumbai, at much affordable prices. Pune has abundant land thus making it possible for developers to offer bigger apartments and more open spaces at attractive ticket sizes. These factors are attracting a lot of investor interest from Mumbai and cities nearby Pune.
Chakan on the Pune-Nasik highway and Talegaon on the Pune-Mumbai highway are contributing
towards Pune emerging as the `Detroit of India’.
Chakan and Talegaon have emerged as the new auto hubs with presence of global automobile
companies like General Motors, Mercedes Benz and Volkswagen. Companies already present in
Pimpri-Chinchwad are also looking to expand operations in Chakan and Talegaon; as land rates
in Pimpri – Chinchwad belt have gone up considerably. Thus, residential development in Chakan
predominantly attracts the LIG segment employed in the nearby industrial zone. Whereas,
Talegaon has recently attracted a mix of LIG and MIG segment as it boasts of a very pleasant
climate, proximity to Mumbai – Pune Expressway and themed residential developments such as
the Esapana Sojourn by TATA Housing.
A high level of employment due to ever increasing number of auto companies in the vicinity has
pushed residential development in nearby areas of Moshi and Chikli which are fast getting
transformed from a LIG segment market to MIG segment. Of late, many category A developers
have entered Moshi and Chikli. These areas have improved infrastructure and are strategically
located between Bhosari MIDC, Chakan MIDC and PCMC MIDC; thus, enabling better
connectivity to PCMC and Bhosari.
East and West Pune continue to be favorites amongst investors Currently, East and West Pune are proving to be the major investor crowd pullers.
East Pune remains the most developed area of Pune and is being largely driven by the CBDs in
Kharadi, Viman Nagar, Magarpatta Cyber City and Kalyani Nagar. A mix of BFSI, IT and BPO
companies is present in this section of the city in addition to major retail stores, all leading malls
and hospitals. East Pune is currently seeing a demand flowing in from the nearby manufacturing
hubs like Shikrapur and Ranjangaon which houses companies such as LG, Whirlpool, 3M, etc.
Hence, this manufacturing hub has generated investor interest in nearby Wagholi area which also
has an added advantage of being connected to the proposed new Pune Airport.
West Pune is being largely driven by demand emerging from the IT hub and SEZ’s concentrated
in Hinjewadi. Six townships are under construction in and around this area; namely, Megapolis
(150 acre township), KUL Ecoloch (110 acres township), Kolte Patil Life Republic (421 acres
township), Paranjape Blue Ridge (140 acres township), Lodha Belmondo (108 acre township) and
Xrbia (200 acres township). Investors from Mumbai and peripheral cities are attracted to West
Pune primarily due to higher probability of good capital gains, easy rental yields, and easy access
from Mumbai-Pune Expressway for personal ‘weekend getaway’ use. These factors have led to a
higher residential uptake in West Pune (Hinjewadi/Wakad/Pimple-Saudagar/Ravet) as compared
to East Pune (Kharadi, Wagholi, Hadapsar, etc).
Developers have increasingly started tapping the investor demand from NRI investors and have
launched road shows and marketing campaigns in countries such as Singapore, Australia, Hong
Kong, Middle East and as far as the United States. In addition, developers have realized the
importance of channel partners and web presence to boost their sales. Developers in Pune are
exploring innovative digital marketing platforms such as designing apps that enable a live chat
with the sales team without having a customer to be physically present to see/book a property.
Further, some developers in Pune are offering branded properties (first Trump Tower and Yoo
Residences of India were introduced in Pune) that have an aspirational value which attract the
who’s who of the industry. Thus, developers in Pune are experimenting with their offerings to
test customer preferences and cater to a wider range of customers.
All the above factors are contributing to an increased investor demand from outside Pune while
demand from Pune end users has stagnated owing to a price demand mismatch (investor
demand pull factor). This is reflected in the conversion-inquiry ratio, which has dipped as an
increase in inquiries was eclipsed by a dip in conversions over the last year. Thus to be able to
match the budget of end-users and maintain sales, Pune residential apartments have witnessed a
contraction in the configuration sizes.
The government has taken numerous initiatives with respect to infrastructure development to
decongest Pune traffic and provide easy accessibility to various areas and cities.
Pune Ring Road is a circular road for Pune city proposed by Chief Minister of
Maharashtra in 2007 to avoid traffic congestion in the city of Pune. The PCMC and PMC are
responsible to make necessary provisions for this plan. This proposed Ring Road is 170 Km
road long and is divided in 4 parts to divert ehicular traffic from Mumbai-Pune-Solapur highway
and roads like Pune-Nashik, Pune-Ahmednagar and Pune-Satara otherwise passing through the
city. This project is currently facing major land acquisition issues.
Pune Municipal Corporation (PMC) has submitted the proposal to the Union
government to make provisions in the annual budget for the Metro project under which a special
purpose vehicle (SPV) – Pune Metro Rail Corporation (PMRC) will be formed, to execute the
project. It will be executed in form of 4 lines running across north-south and east-west of the city.
Pune airport has seen 50% increase in the number of passengers as well as air traffic movement in the past five years. The state government allocated Rs. 2 billion (US $31 million) in August 2012 to acquire 1,800 hectares of land for the airport. The proposed airport will be located near Rajgurunagar, in Khed District and will be accessible from Chakan.
PCMC Infrastructure: Pimpri-Chinchwad area is already known to have world-class infrastructure
with respect to the road network which provides uninhibited access to various areas in this
region. Efforts are in place to replicate this model in the upcoming areas of Pune.
Connectivity to Hinjewadi: Plans are upbeat to connect Hinjewadi via Baner-Balewadi road and
from Sus to improve the existing accessibility to Hinjewadi which will benefit all those who travel
to the three phases of the IT Park.
In addition to above developments, real estate dynamics of the city have improved owing to
numerous flyovers and subways being constructed in different parts of the city such as
Shivajinagar and PCMC. Widening of roads particularly around Wakad, Pimple Saudagar
Hinjewadi and other prime locations has been taken up to rid the city of all possible bottlenecks.
With the above initiatives to improve external accessibility, each micro-market in Pune is also in
the process of becoming self-sufficient internally too. All the micro-markets are witnessing set up
of all major retail outlets, entertainment destinations, restaurants, etc. which is likely to eliminate
the need to move to the CBD’s in the long run.
Pune remains a robust real estate market. The real estate market in Pune has matured post the slow-down of 2008 – 10 and has become more robust in the recent past. Real estate prices have recovered and prices of new launches increased by 10% y-o-y in December 2014. Developers are trying to venture into projects only after factoring in their capacity to deliver. Also, they are releasing supply into the market after gauging the demand for units; thus, building a higher holding capacity. Likewise, buyers have resorted to doing a detailed research of available options, due diligence of the builder and the project, before booking any property.
A new noticeable feature of the market is that of developers launching products of right-size and
right-price to maintain sustained cash-flows by focusing on volume sales. At the same time,
developers have introduced many offers in conjunction with home finance companies and banks
to cater to the customer who wants a flexible payment scheme to buy a property with minimum
or maximum own contribution. These strategies are aimed at boosting the sales volume.
Overall, the sector is expected to register a positive growth over the long run driven by favorable
reforms by the new single majority government at the Centre and commercial growth potential of
this city. This is because the industry is expected to be fuelled by the growth momentum in the IT
industry supported by the automobile industry also as they look to expand their manufacturing
operations in Chakan and Talegaon and the city grows into an IT, automobile and manufacturing
hub. In addition, demand from Mumbai, NRI’s and nearby cities of Pune is expected to keep the
demand robust in this property market.