Pune Insite Report Apr-Jun 2015

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Pune Insite Report_Apr-Jun 2015

City Highlights

Pune’s real estate market chugged along well with increase in demand for commercial space. While residential demand remained low with buyers adopting a wait-and-watch mode, market for luxury properties saw an upward movement due to demand from the NRI segment.

Significant price movements in Pune_Apr-Jun 2015

  • In line with the general sentiment across all major real estate markets in the country, Pune too depicted a subdued residential market in Apr-Jun 2015 as against Jan- Mar 2015, recording an average growth of two per cent.
  • The city witnessed a significant drop in the number of new launches in the last one year. The second quarter of 2015 remained largely passive as far as new launches were concerned with the number of ready and under-construction units posting almost no change Q-o-Q.
  • While sales remained passive in the last six months, NRIs and HNIs kept the luxury market burgeoning. Also, commercial uptake improved in the Secondary Business District (SBD) areas as well as in localities surrounding Hinjewadi, indicating a residential revival on the cards.
  • The long pending announcement of Pune metro project with underground and elevated corridors is expected to boost property prices.
  • With the new IT Policy, residential properties around IT companies are expected to witness a surge in demand and prices. The state government has proposed that companies can develop ‘critical infrastructure’ like approach roads connecting to highways besides providing basic amenities such as water, sewage etc. In lieu, they will be given rebates in property tax and premiums paid to the government for higher Floor Space Index (FSI).
  • Initiatives by the Pune Municipal Corporation (PMC) such as the MoU with GRIHA (Green Rating for Integrated Habitat Assessment) and measures to ensure more water supply for the city are expected to impact the real estate market indirectly.

 Key Influencers in Pune_Apr-Jun 2015

Capital Analysis

  • Top performers in Pune_Capital Values_Apr-Jun 2015The capital market in Pune remained largely stable with more than 60 per cent of the tracked localities showing a rise in capital values in Apr-Jun 2015, as against the previous quarter. This resulted in an average growth of two per cent in values during this period.
  • Localities on the peripheries and outskirts of the city recorded the highest rise in capital values. Increased demand on the back of affordable properties and investor speculations resulted in this trend.
  • Chinchwad posted the highest rise of 13 per cent in capital values during the second quarter of 2015. Apart from affordability, improved physical and civic infrastructure such as water supply and development of BRTS has pushed the prices up.
  • Phursingi also recorded a significant rise of over 10 per cent in capital values. Proximity to Hadapsar and price competiveness has resulted in demand spilling over to the area. Further, presence of Phursungi IT Park and increased office space absorbtion in the last one quarter have fueled growth in the residential market.
  • Proximity to premium residential locations such as Koregaon Park, Kalyani Nagar and Camp have placed Yerwada high on location attractiveness index. The locality witnessed a rise of eight per cent in Apr-Jun 2015, as against the previous quarter due to increased demand, particularly from the IT workforce.
  • Completion of several residential projects in Pisoli, Hadapsar, Wanowrie & Ambegaon upped property prices.

 Rental Analysis

  • Top performers in Pune_Rental Values_Apr-Jun 2015The rental market in Pune grew on the back of a burgeoning IT, manufacturing and education sector recording an average growth of seven per cent in the last one year (Apr-Jun 2015 against 2014). The market remained largely upbeat with over 70 per cent of the tracked localities registering a rise in rental values.
  • Pimple Nilakh has always remained a preferred residential option due to its proximity to premium areas such as Aundh. Completion of several residential projects and setting up of multiple new schools in the last few months has propelled the locality to the top spot in terms of rental growth in the last one year. Pimple Nilakh recorded a hike of nearly 20 per cent in rental values in the said period.
  • Localities in the East continued to clock a steady rise in rental values Y-o-Y. Areas such as Hadapsar, Magarpatta and Viman Nagar recorded a rise of nearly 12-15 per cent since Apr-Jun 2014.
  • Proposed road infrastructure and enhanced connectivity has given an impetus to the rental market of areas such as Hinjewadi, Wakad, Baner and Pimple Saudagar. Improvment of physical infrastructure like widening of roads and the plan to connect Hinjewadi to the Baner- Balewadi Road to improve existing connectivity to the IT hub pushed up rental values by 8-10 per cent
  • Affordable areas such as Dhanori, Baner-Pashan Link Road and Singhad Road saw a hike in rental values.

 Supply Analysis

The supply analysis of Pune indicates a large mismatch between the demand and supply statistics of the city. The large number of ready to use residential units available for sale were indicative of the slow rate of transactions in the city.

Supply by property type in Pune_Apr-Jun 2015Availability of Different Property Types

  • Supply of different property types in Pune – residential apartments, independent houses/villas and builder floors - remained unchanged in Apr-Jun 2015, as compared to the first quarter of 2015.
  • Residential apartments continued to be the most supplied property type across the city forming nearly 95 per cent of the total residential inventory. This was similar to what was noted in Jan-Mar 2015.
  • Maximum supply of apartments was recorded in the high-income housing segment (Rs 60 lakh-1 crore), with close to 40 per cent availability.
  • Independent houses/villas continued to witness low supply in the city.
  • Similar to independent houses/villas, supply of builder floor units also remained modest contributing only marginally towards the total inventory.

Availability of Property by Budget

  • Supply by budget in Pune_Apr-Jun 2015Supply of residential units was uniformly distributed among the three budget ranges- upto Rs 40 lakh, Rs 40-60 lakh and Rs 60 lakh-1 crore. While properties priced between Rs 60 lakh and 1 crore had the maximum share of supply, the other two categories witnessed a supply of close to 20-25 per cent in Apr-Jun 2015.
  • Almost 70 per cent of the properties in the most supplied budget range (Rs 60 lakh-1crore) were ready for use, while the rest were under-construction.
  • The Rs 40-60 lakh and Rs 1-2 crore budget categories also saw a significant supply of ready to use units, with 65-70 per cent share.
  • Luxury-housing segment having properties priced above Rs 1 crore formed one-fifth of the total residential stock in the city during Apr-Jun 2015. This was a marginal drop of two per cent from the previous quarter. More than 65 per cent of the total supply of luxury properties in the city were ready for use, indicating fewer new projects concentrating on luxury housing segment.

BHK-wise Distribution of Property

  • Supply by configuration in Pune_Apr-Jun 2015In line with the trend noted in Jan-Mar 2015, 2BHK units continued be the most supplied configuration in the quarter ending June 2015. The category posted a supply of more than 45 per cent.
  • Maximum share of supply in the 2BHK category was ready to use. With over 25 per cent market share, the 3BHK category remained the second most supplied configuration, following the demand trend in the city.
  • Similar to the 2BHK category, nearly 65 per cent of the supply in the 3BHK category was ready for use, indicating a huge inventory pile up.
  • Houses with 1BHK configuration also formed a considerable chunk of the total supply in the residential market. It registered a supply of more than 20 per cent during Apr-Jun 2015, similar to the previous quarter.
  • Supply of properties with 4BHK configuration continued to be limited in the city. More than half of the total inventory in this category was ready to occupy, indicating a slow transaction rate for larger residential units.

Ready to move in vs Under-construction 

  • Supply by construction status in Pune_Apr-Jun 2015Residential demand in Pune seemed subdued since the beginning of 2015. This was reflected in the large number of ready residential units available for sale in the city.
  • In the quarter ending June 2015, nearly 65 per cent of the total residential stock in the city was ready to use. This was similar to what was recorded in the last quarter. Majority of the ready to use properties (one-third of the total supply) were in the high-income housing segment which is budgeted between Rs 60 lakh and Rs 1 crore.
  • Ready to use units were also available in the budget categories of Rs 40-60 lakh and up to Rs 40 lakh. A healthy supply of over 20 per cent was noted in each of these categories.
  • Supply of under-construction properties stood unchanged since the first quarter of 2015 at close to 35 per cent. This indicated the lack of fresh launches in the city.
  • Most of the new stock in the city has been added in areas outside the Pune Municipal Corporation (PMC) limits. As per the realty report by Gera Developers, out of the total new stock added in the past six months between January and June 2015, only about 25 per cent has been added within the PMC limits. This indicates that the city is expanding its horizons to cater to the growing need of affordable housing. What needs to be looked at is how the government plans connectivity links from these areas to popular zones such as IT hubs and business townships in the city.
  • In line with the high demand for 2BHK units, nearly 55 per cent of the total under-construction properties in the city were in the 2BHK category. This was followed by the 3BHK segment, with close to 25 per cent supply.

Annexures

 

Capital
Values

Locality

Apr-Jun 2015

% Change

Capital
Values

Locality

Apr-Jun 2015

% Change

 

Akurdi

5650

-1

 

Pimple Nilakh

7000

1

Alandi Road

4650

1

Pimple Saudagar

6850

1

Ambegaon

5300

6

Pimpri

6150

3

Aundh

9000

3

Pirangut

3650

-3

B.T Kawade Road

6650

-1

Pisoli

4300

8

Balewadi

6600

-1

Prabhat Road

17000

-3

Balewadi Phata

6800

-8

Punawale

5300

6

Baner

6700

3

Rahatani

6000

0

Baner Pashan Link Road

7600

0

Ravet

5550

3

Bavdhan

6850

1

Salunke Vihar

6650

9

Bhugaon

5850

6

Senapati Bapat Road

13350

3

Bibwewadi

8000

-5

Shastri Nagar

8150

1

Bibwewadi- Kondhwa Road

6400

-1

Sinhgad Road

6500

2

Boat Club Road

15800

4

Sopan Baug

11100

1

BT Kawade Road

6650

-1

Sus

5950

-2

Camp

8400

1

Talegaon

3650

-5

Chakan

3350

2

Tingre Nagar

5600

-5

Charholi

4900

10

Undri

5200

2

Chinchwad

6125

13

Viman Nagar

7700

4

Dhanori

5300

3

Vishrantwadi

5560

-2

Dhayari

5350

2

Rental
Values

Locality

Apr-Jun 2015

% Change

Dhayari Phata

5450

-1

 

Aundh

19

6

Dighi

4230

3

Balewadi

13

8

Erandwane

13150

4

Baner

14

8

Hadapsar

6050

6

Baner - Pashan Link Road

13

8

Handewadi

4250

-1

Bavdhan

12

9

Hinjewadi

6250

3

Bibwewadi

12

0

Kalewadi

5450

-9

Chinchwad

13

8

Kalyani Nagar

9950

6

Dhanori

11

10

Karve Nagar

9150

3

Hadapsar

15

15

Katraj

5300

6

Hinjewadi

11

10

Katraj- Kondhwa Road

5000

0

Kalyani Nagar

23

0

Keshav Nagar

5750

6

Karve Nagar

13

8

Kharadi

6700

5

Kharadi

12

9

Kondhwa

5400

2

Kondhwa

10

0

Koregaon Park

11650

6

Koregaon Park

26

0

Kothrud

9400

3

Kothrud

17

6

Lohegaon

4500

3

Magarpatta City

18

13

Magarpatta

8500

4

Pashan

12

9

Manjri

5100

-10

Pashan-Sus- Road

12

9

Model Colony

15300

-3

Pimple Nilakh

19

19

Mohamadwadi

4700

-6

Pimple Sau­dagar

13

8

Moshi

4650

6

Sinhagad Road

10

11

Mundhwa

5550

5

Undri

9

0

Nigdi

6050

-3

Viman Nagar

19

12

Pashan

7400

0

Vishrantwadi

13

8

Pashan-Sus Road

6900

6

Wadgaon Sheri

16

0

Paud Road

8100

-3

Wagholi

9

0

Phursungi

4450

11

Wakad

12

9

Pimple Gurav

6500

3

Warje

12

9

*All prices are per sq ft rates
*Capital values represent quarterly change
*Rental Values represent annual change


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