According to property consultant Knight Frank’s yearly report - India Real Estate, Pune witnessed over 40 percent drop in new launches and a seven percent drop in property prices between July-December 2017. Post demonetisation and implementation of Real Estate (Regulation and Development) Act, the Pune real estate market has failed to propel sales in both residential and office segment. However, the rise of co-working space providers in the city in the commercial sector is encouraging. Paramvir Singh Paul, Knight Frank Pune Branch Director said that although Maharashtra has been the first state to notify RERA rules and eventually implemented it across the state, there has been no significant impact on sales in Pune in H2 2017 on account of revived buyer confidence. He further added that ready to move-in category is doing better at the moment and H2 2017 has shown that Pune’s real estate market is consumer’s market.
The report also highlighted that the city new launches in the city went down by 77 percent compared to 2012 (when it was at peak) while the sales volume in H1 2017 escalated by 5 percent but the second half witnessed a fall of 2 percent. For the first time, it was observed that property prices have plunged by 7 percent and with added discounts, it goes up to 12-13 percent. Restricted new launches helped the developers clear unsold inventory which went down by 43 per cent. Paul further added that RERA implementation would result in increased buyer confidence gradually. At present, only genuine buyers are driving the market due to pricing and enhanced confidence infused by RERA in the last six months.
In office and commercial segment, new completions are as low as 71 percent as developers are diverting funds towards finishing residential projects. The vacancy levels at 6 per cent have hit five year low while co-working space providers is being seen as an emerging trend. The total inventory overhang in Pune’s market is only about 13.9 months for around 1 lakh supply.