Pune Insite Report Oct-Dec 2014

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Buildings

City Highlights

The residential real estate market in Pune continued its upward trend with a seven per cent growth in Oct-Dec 2014. Increasing input costs to the builders, coupled with increased investor demand from the peripheral cities are seen as major drivers for this growth. Upcoming infrastructure like metro and international airport in Pune has also benefitted the realty market.

Pune map

  • The average prices of residential apartments in Pune increased from Rs 6500 per sq ft in Jul-Sep 2014 to Rs 6600 in Oct-Dec 2014. This translates into a capital appreciation of two per cent. This is against the three per cent hike that the city witnessed in Jul-Sep 2014 quarter as against its previous one. Thus, the overall growth that the city has remained constant in the last six months. 
  • Quarter-on-quarter, Pashan in West Pune witnessed the maximum capital appreciation and property prices grew by 18 per cent. Located in the vicinity of the IT Park at Hinjewadi and near the Mumbai-Bangalore National Highway, Pashan is home to various state and central government establishments in Pune. Housing prices in this popular residential suburb jumped over 13 per cent in the last one year. The region attracts both end users as well as investors owing to its location, sound social infrastructure and proximity to IT offices. 
  • Rising market sentiments led to 13 per cent quarterly spurt in property prices of Model Colony in Central Pune. The year-on-year increase has been to the tune of 17 per cent.

top performers pune

 

top non performers pune

  • KEY INFLUENCERS

    • Increase in land cost and construction costs have pushed the housing prices up
    • Proximity to Mumbai, the commercial capital of India
    • Pune witnesses a lot of housing demand from peripheral areas like Ahmednagar, Nashik, Kolhapur, Solapur, Satara, Karad and Nagpur
    • Upsurge in the property prices of localities near major connectivity links like Mumbai-Pune Expressway and Mumbai-Bangalore Highway
    • Significant presence of both manufacturing and service sectors
    • Upcoming infrastructure (Metro rail, international airport, etc)

    Pimpri and Tingre Nagar scored 12 per cent capital appreciation each this quarter. While its strategic location on the Pune-Mumbai highway (NH-4) and in Pimpri Chinchwad – a major industrial hub and one of the biggest industrial zones in Asia – helped Pimpri score well on the ROI scale, Tingre Nagar fared well due to affordability and connectivity quotient. 

  • Chinchwad, another locality in the Pimpri Chinchwad region in North Pune, witnessed a surge of eight per in Oct-Dec 2014 as against the previous quarter. P.C.N.T.D.A. (Pimpri Chinchwad New Township Development Area), also known as Pradhikaran is a planned township that is divided into several sectors. Chinchwad is an important part of the township and witnesses huge demand from working population. 
  • Interestingly, Dighi – a sub-urban town located 15 km from Pune also saw an 11 per cent upsurge in property prices. A newly emerging residential pocket, Dighi provides residential flats in the range of Rs 4200-4900 per sq ft, 20-40 per cent lower than most localities in Pune. There’s a huge demand for affordable housing in Pune from both within the city and neighboring cities like Mumbai, Ahmednagar, Nashik and Kolhapur and hence Dighi is emerging as a popular residential pocket. 
  • Magarpatta, the satellite township, saw a surge in property prices by 10 per cent last quarter. Developed over 400 acres of land as a residential cum commercial town, it is home to various IT/ITES corporates and drives a lot of interest from working population. The town has been on a growth spree for the last few years and property prices have jumped from Rs 7100 per sq ft in Oct-Dec 2013 to Rs 7950 per sq ft in Oct-Dec 2014. This converts into a capital appreciation of 12 per cent in the last one year.

“Capital values rose in Pashan, Model Colony, Pimpri, Chinchwad and Tingre Nagar by 8%-18% in Oct-Dec 2014 due to positive market sentiments and improving infrastructure around these localities.”

  • Undri in South Pune has been witnessing major real estate activity owing to the availability of land parcels and presence of social infra like reputed schools, international institutions and hospitals. The locality grew by nine per cent this quarter and by 11 per cent in the last one year. 
  • One of the upcoming suburbs of Pune, Warje recorded a growth of eight per cent this quarter and 13 per cent annually. Located on Katraj-Dehu Road Bypass in between Pune’s Chandni Chowk entry and Katraj entry, the town is home to various manufacturing plants including Cumins India and also various educational institutions. Improving infrastructure and favorable location has helped Warje earn a place in top ten gainers for Pune in Oct-Dec 2014. 
  • Koregaon Park recorded eight per cent appreciation quarter-on-quarter and 13 per cent year-on-year. Its status as a prime locality, easy accessibility to the airport, railway station and the city’s IT hubs (Kalyani Nagar and Magarpatta) have been the main factors propelling demand. State-of-the-art social and civic infrastructure in the locality have placed it high on location attractiveness index. 
  • Handewadi, situated near the Katraj-Dehu Road Bypass, about 14 km from Pune, witnessed the maximum drop in property prices in Oct-Dec 2014 to the tune of12 per cent. Slow growth as compared to other localities can be attributed to sluggish development on social and physical infrastructural front. 
  • Other localities, which did not perform well on the ROI scale include Erandwane, Senapati Bapat Road, Chikhali and Wadgaon Sheri. Prices of residential apartments in these localities dropped between 10 and seven per cent. While degrowth in Erandwane can be attributed to it being under-developed, capital prices on Senapati Bapat road declined due to civic issues like traffic gridlocks.
  • Located in Buldhana district, property prices in Chikhali dropped by seven per cent due to its distance from Pune. The town is located over 200 km from Pune and is yet to witness major infra developments. Initial hype about the newly developing town as an investment zone near Pune made it earn a six per cent annual average capital appreciation though (from Oct-Dec 2013 to Oct-Dec 2014). 
  • Wadgaon Sheri, one of the most popular residential and commercial hubs of Pune, saw a seven per cent drop in the property of residential apartments majorly owing to previously inflated prices and price corrections this quarter. 
  • Localities where prices remained stagnant this quarter included Pirangut and Ambegaon Budruk.

LOCALITY

OCT-DEC 2014

JUL-SEP 2014

CHANGE

Baner

7050

6650

6%

Baner Pashan Link Road

7750

7300

6%

Bavdhan

6750

6500

4%

Chakan

3200

3150

2%

Chikhali

4250

4550

-7%

Chinchwad

5750

5300

8%

Dighi

4400

3950

11%

Erandwane

11450

12600

-9%

Fatima Nagar

5600

6200

-10%

Handewadi

4050

4600

-12%

Hinjewadi

5900

5650

4%

Kalyani Nagar

9400

8750

7%

Katraj

5000

5300

-6%

Katraj Kondhwa Road

4700

5000

-6%

Kiwale

4400

4700

-6%

Koregaon Park

11250

10400

8%

Lohegaon

4300

4150

4%

Magarpatta

7950

7250

10%

Manjri

5200

4850

7%

Model Colony

16500

14550

13%

Pashan

7250

6150

18%

Pashan-Sus Road

6800

6550

4%

Phursungi

4050

4150

-2%

Pimple Gurav

6150

6000

3%

Pimple Nilakh

6500

6450

1%

Pimple Saudagar

6600

6250

6%

Pimpri

6150

5500

12%

Pimpri Chinchwad

4900

5150

-5%

Pirangut

3750

3750

0%

Pisoli

4000

3950

1%

Prabhat Road

17000

16900

1%

Punawale

4900

4850

1%

Rahatani

5700

5400

6%

Ravet

5350

5150

4%

Salunke Vihar

6050

6250

-3%

Senapati Bapat Road

11650

12500

-7%

Sinhgad Road

6050

5700

6%

Tale Gaon

3500

3550

-1%

Thergaon

5700

5850

-3%

Tingre Nagar

5900

5250

12%

Undri

4950

4550

9%

Vadgaon Sheri

5950

5600

6%

Viman Nagar

7500

7150

5%

Vishrantwadi

5750

5700

1%

Wadgaon Sheri

5750

6150

-7%

Wagholi

4550

4500

1%

Wakad

6000

5900

2%

Wanowrie

6850

6700

2%

Warje

7150

6600

8%

* Values represent average capital per sq ft rates

Rental Analysis

  • Rentals in Hinjewadi appreciated by almost 30 per cent in the last one quarter. The IT hub located in West Pune witnesses huge demand for rented accommodation from migrants working in the city. As a result, rentals here grew up from Rs 14000 per month in Jul-Sep 2014 to Rs 18000 per month in Oct-Dec 2014 for an apartment measuring 1000 sq ft. 
  • Pimple Saudagar saw rental values rising by 29 per cent (from Rs 14 to Rs 18 per sq ft) between Jul-Sep 2014 and Oct- Dec 2014. Recent developments such as the six-lane Nashik Phata to Wakad Bypass and improved connectivity with Hinjewadi’s Software Technology Park, Tathawade IT Park, EON IT Park and Magarpatta City have been the primary factors fueling growth of rental values in the locality. 
  • While property prices in Viman Nagar in East Pune grew by five per cent this quarter, rental prices shot up by 26 per cent. The locality serves not only one of the major IT hubs in Pune, it is also a preferred residential destination promoting the ‘walk to work’ culture, which is fast becoming popular in the city. 

“Rental values in Hinjewadi, Pimple Saudagar, Viman Nagar and Baner Pashan Link Road appreciated by 25%-30%.”

  • Rentals in Baner Pashan Link Road appreciated by 25 per cent in Oct-Dec 2014 as against the previous one. The link road connects the suburbs of Pashan and Baner and has residential housing complexes spawned on both sides of road. 
  • Wakad, located in Pimpri Chinchwad, benefitted from the fast-tracking of the Delhi Mumbai Industrial Corridor (DMIC) alongwith the proposed development of areas around the Eastern Express Highway and the encouragement given to IT and corporate parks by the state government. All these factors collectively resulted in 21 per cent growth in rentals in Oct-Dec 2014 as against the previous quarter.

LOCALITY

OCT-DEC 2014

JUL-SEP 2014

CHANGE

Aundh

18

16

13%

Baner

19

17

12%

Baner Pashan Link Road

15

12

25%

Bavdhan

14

15

-7%

Bibwewadi

16

14

14%

Chinchwad

15

13

15%

Hadapsar

13

11

18%

Hinjewadi

18

14

29%

Kalyani Nagar

25

22

14%

Karve Nagar

15

16

-6%

Kharadi

16

16

0%

Koregaon Park

28

25

12%

Kothrud

17

18

-6%

Magarpatta

23

22

5%

NIBM

13

12

8%

Pimple Gurav

13

12

8%

Pimple Saudagar

18

14

29%

Pimpri Chinchwad

12

12

0%

Ravet

10

11

-9%

Sinhgad Road

12

10

20%

Tingre Nagar

15

13

15%

Undri

10

10

0%

Viman Nagar

24

19

26%

Wagholi

10

9

11%

Wakad

17

14

21%

* Values represent average capital per sq ft rates

Supply Analysis

With residential apartments having the maximum share in the total supply of property in Pune, builder floors and inde-pendent houses/villas have negligible numbers. Maximum inventory supply for Oct-Dec 2014 is within Rs 40 lakh budget category and the second highest inventory supply is in the Rs 60 lakh-1 crore category.

Availability of Different Types of Property

  • property typeSociety apartments have had always dominated the property supply in Pune and continue to do so in Oct- Dec 2014 as well. With almost 95 per cent share, society apartments hardly leave any space for other property types like builder floors and independent houses or villas. 
  • With most of its demand coming from people working in the IT sector, the apartment culture is more prevalent in the city. Limited demand for floors and houses also keep the supply restricted to two and four per cent respectively. 
  • Quarter-on-quarter comparison reveals that supply of apartments in the city have increased marginally by one per cent in Oct-Dec 2014, while that of builder floors and independent houses have remained constant. 
  • Year-on-year comparison shows that there has been almost a 50 per cent growth in the total supply of residential apartments in the city. New project launches in the last one year (Oct-Dec 2013 to Oct-Dec 2014) have led to the increased supply. 
  • Interestingly, though the supply of builder floors is negligible in the city, there has been over 1000 per cent increase in their numbers in the last one year. Yearly supply of independent houses/villas has gone up by 34 per cent.

Availability of Property in Different Budgets

  • BudgetPune has most of its property supply in affordable housing category (i.e. property priced within Rs 40 lakh). With a 55 per cent share, affordable category is followed by high-end income housing (property priced over Rs 60 lakh-1 crore) with a 20 per cent share and then by luxury and mid-income housing categories with 13 per cent and 12 per cent shares respectively. 
  • Quarter-on-quarter comparison reveals some changes in the supply equation in Pune by budget. For instance, while the supply for affordable category has dropped by four per cent, the numbers have increased for property falling under mid-income and high-income housing segments by two and three per cent. 
  • Interestingly, annual comparison reveals that the supply for property priced within Rs 40 lakh has fallen down by almost 10 per cent. This hints towards the rising construction costs leading to declining number of affordable housing options. Subsequently, supply for all property priced Rs 40 lakh-1 crore has increased by 10 per cent.

RTM UC puneReady to Move vs. Under-construction

  • Quarter-on-quarter comparison reveals that the supply equation for ready to move in and under construction properties in Pune have changed for properties priced within Rs 40 lakh. While in Jun-Sep 2014, 60 per cent of the property in this budget category was ready to move in, in Oct-Dec 2014, the share of under construction increased due to new project launches. 
  • For properties priced in the range of Rs 40-60 lakh, the supply of under construction inventories increased 15 per cent in Oct-Dec 2014 as against the previous quarter. 
  • For property priced Rs 60 lakh-1 crore, supply of ready to move in property dropped by seven per cent in Oct-Dec 2014 as compared to the previous quarter. Subsequently, the supply of under construction properties increased by the same share. This could be because of more project launches in this budget category. 
  • The equation of under construction versus ready to occupy inventory remained more or less same in the last six months, probably due to lack of new launches or fresh possessions in this budget category.

BHK wise PuneBHK-wise Distribution of Property

  • 2BHKs continue to be the most supplied units in Pune with almost 50 per cent share in the total supply of units in Oct- Dec 2014. With growing demand from working population and migrants from other cities, 2BHKs also have a high demand in the IT city. Within 2BHK units, almost 60 per cent are ready to occupy and the rest are under-construction. 
  • 3BHK and 1BHK units have similar shares in the total supply of apartments in Pune. There hasn’t been any noteworthy change in the share in the last two quarters. Within 1BHK units, most are ready to move in. For 3BHKs, ready to move in and under construction have equal shares.

 

 

 

 

 

“More than half the residential apartments in Pune are affordably priced to cater to the increasing demand from working and migrant population"


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  • Hines April 14, 20162:14 am

    It’s a relief to find someone who can explain things so well

    Reply
  • Artie April 14, 20165:53 am

    Tip top stuff. I’ll expect more now.

    Reply
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