Metro expansion revives market sentiment
The extension of the Pune metro from Chinchwad to Nigdi would not only offer seamless connectivity to the high-traffic areas of Bhakti Shakti Chowk and Swargate, but is also expected to drive residential demand in the outlying locales alongside. Moreover, promising impeccable connectivity in the future, the groundwork on the 71 km-long Light Rail Transit (LRT) has also been expedited.
TOD to pave the way for realty expansion
Transit Oriented Development (TOD) in 500 m radius around the metro stations, along with a Floor Space Index (FSI) of four, is likely to pave the way for new real estate projects in the city. Primarily, the Pune Metropolitan Region Development Authority (PMRDA) plans to expand the project only along four of the twelve under-construction metro corridors in the city.
Property tax rate remains unchanged
The Pimpri Chinchwad Municipal Corporation (PCMC) kept the property tax rate unchanged for 2019-20. The move has not only relieved nearly five lakh property owners in the region, but may boost home ownership appetite in peripheral locations such as Wakad, Akurdi, and Pimple Gurav.
Government proposes ready reckoner rate hike
The State government’s proposal to hike the ready reckoner rates from April 1, 2019, onwards spurred property transactions in the city in the preceding quarter. Noticeably, close to 10 lakh properties have been registered within the municipal limits in the last one year, of which Jan-Mar 2019 bags the maximum share.
Despite political uncertainties and liquidity crisis faced by developers, Pune witnessed a record 30 percent surge in residential property sales, YoY. The city also saw the registration of around 12,000 properties in new and resale categories in Jan-Mar 2019. Of this, almost 80 percent of the transactions were done by first-time homebuyers, hinting at the improving buying sentiment in the city.
New launches remained restricted as GST announcements pertaining to Input Tax Credit (ITC) adjustments left developers in straits. Of the 4,200 residential units added in the quarter, maximum were concentrated in the western quadrant of the city, followed by East and South. Notably, Mahalunge, Ravet, Wakad and Balewadi in the West reported around 70 percent of the new supplies in the city. Pimpri Chinchwad Municipal Corporation’s (PCMC) Single Window Clearance, pre-approved land banks, and improved infrastructure, turned realtors’ attention to the West.
Kharadi in the East also remained a preferred choice of the developer community. The long-hovering liquidity crisis forced realtors to sell the existing stock at reduced prices to ensure consistent inflow of funds for the timely completion of the ongoing projects. The trend was observed in both mid-income and luxury housing segments.
In the backdrop of limited new launches and improved sales, unsold inventory trimmed across the city. Pune held 23 months of inventory in Jan-Mar 2019 as against 48 months in Oct-Dec 2018. The availability of ready units, coupled with developers’ right-sizing and right-pricing strategy holds the potential to take the city closer to a realty revival in the ensuing quarters.
Increased affinity towards affordable housing and the emergence of new micro-markets kept Pune’s residential market afloat in Jan-Mar 2019. Despite a one percent increase in the stamp duty charges, property deals reported an uptrend in the quarter. The slight correction of prices offered by the developers helped revive the home ownership appetite.
Progressive infrastructure developments and new project announcements by Category A developers in the price bracket of Rs 35-65 lakh improved homebuying sentiment in the city. While 1 BHK and 2 BHK units were the most supplied configurations in the quarter, the latter remained the most popular category amongst homebuyers.
The city’s average capital ‘asks’ remained unchanged in Jan-Mar 2019; however, a few locales, particularly in the western part of the city outperformed others on the capital growth chart. Bhugaon, for instance, in the West, and Dhankawadi in South Pune topped the popularity charts, each recording a five percent growth in the average weighted capital prices, QoQ.
While Dhankawadi remained a popular destination for resale properties, Bhugaon witnessed traction in the newly launched projects from the workforce of the commercial hubs located in Kothrud (6 km) and Hinjewadi (20 km). Average apartment prices in Dhankawadi and Bhugaon stood at around Rs 5,000 per sq ft and Rs 5,500 per sq ft, respectively in Jan-Mar 2019.
Other micro-markets that captured homebuyers’ attention include Ravet, Balewadi, and Wakad in the West, and Hadapsar in the East.
While housing demand in the western pockets improved on the back of their proximity to the IT hub of Hinjewadi and the proposed metro corridor, Hadapsar benefitted from the spillover demand from Magarpatta and Kharadi. Average weighted capital values in the areas grew to the tune of 3-4 percent, QoQ.
Unlike the previous quarter, luxury properties priced between Rs 1 crore and Rs 2 crore also reported a marginal revival in demand. However, affordable units pegged within Rs 40 lakh continued to rule the roost. Enquiries for ultra luxury properties priced beyond Rs 2 crore remained on the back-burner.
The rental market remained positive and recorded an uptick of three percent in the average rental ‘asks’, YoY. Micro markets that remained the mostpreferred by the tenant community include Baner, Narhe, Manjri, and Chakan.
While Baner and Manjri remained the sought-after locales for the working professionals of Hinjewadi and Magarpatta, respectively, Narhe and Chakan were favoured by blue-collar workers employed in the nearby industries. Average annual rental values in the locales grew to the tune of 8-9 percent, each. Amongst others, Balewadi, Ravet, and Phursungi also witnessed increased rental demand and recorded a 6-7 percent hike in rentals, YoY.
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