Infrastructure expansion boosts realty
Pune Municipal Corporation (PMC) fastened the development of a 37 km-long High Capacity Mass Transit Route (HCMTR) by acquiring the 24 m-wide road near Savitribai Phule University. The stretch would ease traffic and trigger residential growth in Aundh, Bibwewadi, Yerwada, Mundhwa and Hadapsar. Further, the metro links from PCMC to Bopodi and from Vanaz to Garware College are expected to become operational by December 2019. The 8 km corridor between Hinjewadi and Balewadi would also become functional by 2020. The development would augment housing demand in the emerging pockets of Wakad, Baner, Balewadi and Hinjewadi.
Residential expansion on the cards
While Pune Metropolitan Region Development Authority (PMRDA) earmarked Rs 320 crore to expedite the development of the Mahalunge-Maan Town Planning scheme, PMC has planned to issue elevation certificates to 450 pending projects in various parts of the city.
Affordable housing receives an impetus
PMC’s approval to nearly 2,000 residential units under the Pradhan Mantri Awas Yojana (PMAY) is likely to bridge the demand-supply gap of budget housing. The units would be constructed in Wadgaon Budruk in Economically Weaker Section (EWS) and Low Income Group (LIG) categories.
Property tax revenue reports a hike
The civic body’s property tax collection hiked by Rs 34 crore in the last one year. Development charges and building permits issued for various realty projects in the newly merged villages of Lohegaon, Mundwa, Undri, Dhayari, Uruli Devachi and Fursungi attributed to the growth. Moreover, the authority has also reduced the penalties levied on the unauthorised buildings. The move would fasten the property regularisation process and generate additional revenues.
Competitive property pricing, improved commercial leasing and ongoing infrastructure expansion ensured buoyancy in Pune’s residential market in AprJun 2019. With the metro development between Hinjewadi and Swargate gaining momentum, the western pockets of the city remained popular among homebuyers. Of the total 9,000 new and resale units added in the city during the quarter, 70 percent are in the western micro-markets of Marunji, Balewadi, Hinjewadi and Ravet. Primary sales volume also surged by five percent, QoQ, with maximum demand localised to areas such as Wakad, Baner, Aundh and Balewadi.
Exemption from GST and immediate property possession led the resale and ready-to-move segments to capture 60 percent of the market demand. The popularity of under-construction units also inched up in the wake of reduced taxes. New launches, however, dipped in Apr-Jun 2019 in the face of the ongoing NBFC Crisis, ambiguity pertaining to ITC benefit under GST and the General Elections. With a seven percent dip, QoQ, primary additions in the city were restricted to only 45 percent of the market share. Noticeably, the resale and the older housing units left unregistered by the builders in the preceding quarters owing to the non-clarity over the GST computation comprised the remaining 55 percent of the inventory.
The quarter saw improved homebuyer demand and limited new launches. This helped abridge the unsold inventory in the city from 23 months in Jan-Mar 2019 to 18 months in Apr-Jun 2019. Developers in Pune now await the upcoming Union Budget 2019-20 for some game-changing announcements such as the reintroduction of ITC benefit and infrastructure status for the realty sector.
* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter
The housing market of Pune continued to grow at a steady pace in Apr-Jun 2019, albeit no change in average weighted prices of residential apartments in the city. While the low-budget homes observed sustained popularity, the demand for high-end properties that waned in the previous quarters, also witnessed a resurgence. The resale market continued capturing homebuyer interest in the quarter ending June 2019.
Compact homes priced within Rs 40 lakh garnered maximum traction across zones. Nearly 70 percent of the residential demand in the city was captured by low-budget units with mid and luxury segments closely following suit. Price competitiveness, coupled with the rationalisation of GST to one percent on affordable homes played a crucial role in bolstering the market demand in the segment.
The western zone of the city remained the hub of affordable homes followed by the south-eastern and south-western peripheries. Key emerging locales that remained popular amongst builders and buyers include Marunji, Hinjewadi, Balewadi, Aundh, Wakad, Baner, Pisoli and Wagholi. The city drew over 65 percent of the affordable demand and supply from these pockets. Some of the reputed builders that established their footprints in the locales include Kolte Patil, Godrej and Shapoorji Pallonji.
Baner topped the capital charts and recorded a three percent growth in the average weighted property values, QoQ. Increased commercial leasing, proximity to the IT hub of Hinjewadi (8 km) and the ongoing metro expansion attributed to the trend. Hinjewadi and Wakad also magnetised homebuyers’ attention and clocked two percent hike, each, in the average weighted capital ‘asks’, QoQ.
Kharadi in the East remained a hotbed for luxury homebuyers. However, despite the addition of 800 new housing units, buyers were inclined towards resale properties owing to the reduced tax burden. Properties pegged between Rs 75 lakh and Rs 1 crore stayed popular amongst the investors
Ultra-luxury apartments priced above Rs 2 crore continued to vie for attention, shifting the developer’s focus on the need to re-strategise and meet the budget expectations of the homebuyers. Reducing the average carpet area of the units would make a substantial difference in price points.
The rental market continued to be upbeat and recorded a four percent growth in the average rental ‘asks’, YoY. Key locales that emerged as the frontrunners with a nine percent growth in rentals include Kharadi, Chikhali and Pimple- Saudagar. While Kharadi benefitted on the back of high livability quotient, and the increased demand from working populace, Pimple Saudagar and Chikhali were preferred on account of improved connectivity to Mumbai-Pune Bypass and the commercial hubs of Hinjewadi, Aundh and the Maharashtra Industrial Development Corporation (MIDC).
Other rental micro-markets that deserve a special mention include Hinjewadi, Hadapsar, Kalewadi and Ravet. The average rental values in the locales showcased 7-8 percent growth, YoY.