Pune Insite Report Jul-Sep 2015

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Pune Insite Report Jul-Sep 2015

City Highlights

Withdrawn consumer sentiments, inflated property prices and low absorption rates in the residential segment shadowed Pune’s realty market in Jul-Sep 2015. Growth was largely concentrated around the affordable suburbs of Pune and new launches took place in localities offering budget housing options.

  • Pune Insite Report Jul-Sep 2015.PNG significant price movementsOne of the major reasons for the consistent slowdown in Pune real estate is the unsold inventory and negative consumer sentiments. Experts believe that lack of government initiatives and proper planning are responsible for the stagnation of the market. 
  • While real estate activity has improved in the suburbs and peripheral locations, issues concerning infrastructure such as good roads and public transport are yet to be dealt with. Better civic amenities will ensure that suburban localities like Wadgaon Budruk, Pashan, Ambegaon and Bhugaon continue to tread on a growth path, as noted in Jul-Sep 2015. 
  • Newly emerging locations witnessed healthy traction from both buyers and developers. While capital rates in such localities are going north, a number of new launches is also a positive sign. In developed locations, on the other hand, unsold inventory pushed the developers to concentrate on offloading the existing stock instead of launching new projects. 
  • With demand still fragile, over-inflated prices in many localities forced buyers to hold back their buying decision. While buyers are pinning hope on price correction, realtors and developers are waiting for government intervention to improve the current situation. 
  • Noticeably, premium and developed locations such as Vitthal Nagar, Viman Nagar and Hadapsar faced infrastructural issues coupled with lack of water and power supply and hence were the bottom performers in the city.
  • Multiple infrastructure projects such as Metro and Bus Rapid Transit System (BRTS) that have been held up for years has resulted in an artificial increase in prices of residential properties. Experts believe, if these projects are not implemented soon, the price bubble might burst and the property market may lead towards correction.

Capital Analysis

  • Pune Insite Report Jul-Sep 2015.PNG Top Performers CapitalWadgaon Budruk clocked a 12 per cent rise in capital values in Jul-Sep 2015 as against the previous quarter. Proximity to Sinhagad Road, affordable housing options and new launches are the primary factors for this growth. 
  • Bhugaon followed suit, with a 10 per cent rise in capital values in the latest quarter. Proximity to two developed localities, Kothrud and Bavdhan is the main propeller for rising demand in Bhugaon. While capital values in Bhugaon are around Rs 5,000 per sq ft, Kothrud and Bavdhan offer properties starting at Rs 8,000 per sq ft and Rs 6,000 per sq ft, respectively. The availability of comparatively affordable residential units and the possibility of development by the local corporation is driving growth in Bhugaon. 
  • With an average capital hike of nine per cent, Pashan is attracting buyers on the back of impending infrastructure developments and availability of affordable properties as compared to the neighbouring localities - Aundh and Baner. There is a road planned from Pashan to Hinjewadi that is expected to ease traffic snarls and bring residents closer to their workplaces, by cutting short commute time. 
  • There has been a consistent shift of population from the city to the suburbs in the last six months. Migration of people has benefited several suburban localities including Ambegaon, Mundhwa, Kondhwa Budruk and Talegaon, which have seen a rise of five to nine per cent, in the Jul-Sep quarter, as compared to the previous quarter. 
  • The downward trend in a few localities in Pune can be attributed to inept planning and power woes. 
  • The bottom performers in Jul-Sep 2015, as against the previous quarter were Vitthal Nagar, Dhankawadi and Dighi, reflecting a 9-14 per cent drop.

Rental Analysis

  • Pune Insite Report Jul-Sep 2015.PNG Top Performesr RentIn keeping with the general trend, most of the localities near IT parks and prime city hubs witnessed a hike in rental values. Several prominent builders have projects in these localities. According to experts, the 2BHK and 3BHK configurations were most popular in the rental space across the city owing to demand from single professionals and nuclear families. 
  • Wagholi topped the list of grossers with a hike of 10 per cent in rental values since January 2015. Located on the Pune-Nagar Highway, Wagholi has gained from its proximity to Kharadi IT hub and speedy social infrastructure development. Several educational institutes are situated here. Proximity to the Sholapur Highway, Bund Garden and the airport has added to its locational advantage as compared to other destinations in the city. 
  • Kalyani Nagar, which clocked a nine per cent rise in rental values in the last three quarters, is a coveted residential locality for IT professionals. Situated close to Koregaon Park, Kalyani Nagar offers luxurious apartments for rent with a 2BHK unit costing about Rs 16,000-20,000 per month and a 3BHK flat about Rs 25,000-40,000 per month. Most of the residents here are highly-paid IT professionals who look for spacious apartments with luxurious amenities. 
  • Balewadi saw rental values surging by eight per in the last three quarters. Tenants looking for affordable options in Pune prefer regions such as Balewadi and Kondhwa. While Balewadi offers 2BHK apartments in the range of Rs 15,000-20,000 per month, units in Kondhwa can be rented for Rs 10,000 to 13,000 per month.

Supply Analysis

The grim capital and rental market rubbed off its impact on the supply of residential inventory in Pune. Supply either plateaued or dipped across all budget categories. The withdrawn consumer sentiment led to stacked inventory, which in turn forced developers to offload the existing stock instead of launching new projects.

Availability of Different Property Types

  • Pune Insite Report Jul-Sep 2015 Supply Property typeDominated by the IT industry, Pune has always recorded a high supply of residential apartments. Most of the single professionals and nuclear families moving to the city prefer gated communities offering all amenities under one roof. In Jul-Sep 2015, residential apartments captured 95 per cent of the total market share, slightly higher than the previous quarter. 
  • Most of the residential apartments offered were in the budget range of Rs 60 lakh to Rs 1 crore. Areas that have been the focus of developers for launching new residential projects in this budget range are predominantly from western Pune. Localities such as Wakad, Baner and Balewadi are the frontrunners in supply of apartments in the said budget range. 
  • Supply of independent houses and villas saw a marginal drop in the current quarter, with total availability standing at three per cent. About a quarter of the total availability of independent houses and villas is in the budget range of Rs 1-2 crore. 
  • Builder floors are the least demanded in Pune, thereby recording a meagre two per cent supply, which has been constant in the last six months.

Availability of Property by Budget

  • Pune Insite Report Jul-Sep 2015 Supply BudgetThe high-income housing segment (Rs 60 lakh - Rs 1 crore) captured more than a quarter of the total market share in the current quarter, up by four per cent compared to the previous quarter. Oversupply in the category afflicted customer sentiments, resulting in a wider demand-supply gap. 
  • Supply of properties in the affordable housing segment (within Rs 40 lakh) and mid-income housing segment (Rs 40-60 lakh) was at par in the current quarter. Wagholi witnessed maximum supply of residential units in both these budget categories. 
  • While localities such as Hadapsar, Moshi and Chakan were the other major contributors in the affordable housing segment, Wakad, Undri and Pimpri Chinchwad contributed to the mid-income housing segment. 
  • Bearing in mind the huge inventory pile up, many developers have stalled the construction of existing projects and withheld new launches in the affordable housing segment. This has resulted in a fall of four per cent in the availability of these units in Jul-Sep 2015. 
  • According to experts, maximum demand and supply in Pune has been for properties priced within Rs 1 crore. Investors who actively choose properties in the luxury (Rs 1-2 crore) and ultra-luxury categories (Rs 2-5 crore) are limited. Therefore, supply in these two segments was the least in Pune.

BHK-wise Distribution of Property

  • Pune Insite Report Jul-Sep 2015 Supply BHKWith supply increasing by four per cent in the current quarter, 2BHK units captured half of the total market share. The general agreement amongst the builder fraternity in the last six months has been to avoid launching new projects due to the dwindling demand. 
  • Suburban regions have seen most of the new launches in Pune owing to competitive prices. Here, majority of the 2BHK units were priced within Rs 40-60 lakh, whereas, the inventory near the Central Business District (CBD) was priced higher, at Rs 60 lakh- Rs 1 crore. 
  • The second most supplied category was the 3BHK configuration, which captured a quarter of the total market share. The average size for a 2BHK or 3BHK apartment in Pune ranges between 1,000 sq ft and 1,500 sq ft. 
  • Majority of the supply of 3BHK units in Pune was in the luxury housing segment (Rs 1-2 crore), closely followed by the high-income housing segment (Rs 60 lakh-Rs 1 crore). 
  • Units configured as 1BHK are preferred by single working professionals. Majority of the 1BHK units are priced within Rs 40 lakh. With a drop in supply of affordable housing, availability of 1BHK units, too, dipped to 19 per cent in Jul- Sep 2015 from 22 per cent in Apr-Jun 2015.

Ready to move in vs Under-construction

  • Pune Insite Report Jul-Sep 2015 Supply Ready vs under constructionPune continues to be an end-user driven market, thereby recording healthy absorption of ready-to-move units. 
  • Uncertainty surrounding the possession of under-construction units and perpetual delays in project deliveries turned buyers away from such units. This, in turn, has increased demand for ready-to-move properties. 
  • Meanwhile, supply of under-construction projects stood at almost 40 per cent, up by three per cent in the current quarter, as compared to the previous. 
  • Experts point out that in the ready-to-move segment, people are increasingly looking at investing in economical housing with an average capital value of Rs 4,500 and 5,500 per sq ft.
  • Developers focussing on affordable housing segment prefer to launch projects in areas which offer adequate civic and social amenities. 
  • Some of the localities on both developers’ and buyers’ radar include suburban areas like Pashan, Bibvewadi, Talegaon, Wadgaon Budruk and Mundhwa.

 

ANNEXURES

CAPITAL VALUES

Locality

Jul-Sep 2015

% Change

CAPITAL VALUES

Locality

Jul-Sep 2015

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akurdi

5750

0

 

Shastri Nagar

6800

-1

Alandi

4050

0

Sinhgad Road

6350

3

Alandi Road

4050

0

Sopan Baug

11600

5

Ambe Gaon

5400

3

Sus

5650

-3

Ambegaon Budruk

5500

9

Talegaon

3850

5

Aundh

9150

2

Talegaon Dabhade

3700

-1

BT Kawade Road

6850

1

Tathawade

6000

5

Balewadi

6600

1

Thergaon

6450

0

Baner

7250

4

Thite Nagar

6650

1

Baner Pashan Link Road

7700

2

Tingre Nagar

5300

-1

Bhosari

5200

-3

Tulaja Bhawani Nagar

6650

7

Bhosle Nagar

16850

4

Undri

4950

0

Bhugaon

5950

10

Uruli Devachi

3100

0

Bhusari Colony

8400

2

Uruli Kanchan

2800

4

Bibwewadi

7650

3

Veerbhadra Nagar

7700

4

Bibwewadi Kondhwa Road

5900

-8

Viman Nagar

7700

3

Boat Club Road

16100

6

Vishrantwadi

5950

-5

Camp

8950

-4

Vitthal Nagar

6200

-14

Chakan

3350

0

Wadgaon Budruk

6400

12

Charholi

4450

-6

Wadgaon Sheri

6250

0

Chikhali

4350

-6

Wagholi

4750

2

Chinchwad

6250

1

Wakad

6500

3

Dange Chowk

6050

-7

Wanowrie

7200

-1

Charholi

4450

-6

Warje

6950

4

Chikhali

4350

-6

Yerwada

7000

4

Chinchwad

6250

1

Yewalewadi

4500

0

Dange Chowk

6050

-7

 

 

 

Dighi

4300

-9

RENTAL VALUES

Locality

Jul-Sep 2015

% Change

Hadapsar

5550

-8

 

Balewadi

13

8

Handewadi

4500

-1

Baner

15

7

Hinjewadi

6100

3

Bavdhan

14

0

Hinjewadi Phase 1

6450

5

Boat Club Road

33

2

Kalewadi

5850

7

Chikhali

9

0

Kalyani Nagar

9450

-1

Chinchwad

13

-7

Karve Nagar

9550

1

Dhanori

14

0

Kharadi

6500

2

Hadapsar

15

7

Kondhwa

5100

-8

Hinjewadi

11

-8

Kondhwa Bud­ruk

5600

6

Kalyani Nagar

24

9

Koregaon Park

11100

-1

Karve Nagar

15

1

Kothrud

8950

-5

Kharadi

15

0

Magarpatta

7950

-2

Kondhwa

13

8

Mundhwa

5800

7

Koregaon Park

26

-4

Narhe

4700

-1

Kothrud

17

0

NIBM

6100

-5

Mundhwa

14

1

Nigdi

6450

1

NIBM

13

-7

Pashan

7800

9

Pashan

12

0

Pashan-Sus Road

6650

-2

Pashan-Sus Road

15

0

Pimple Gurav

6600

2

Pimple Nilakh

19

0

Pimple Nilakh

7050

4

Pimple Sau­dagar

13

-7

Pimple Saudagar

6950

2

Ravet

11

0

Pimpri

6100

1

Sinhgad Road

12

0

Pimpri Chinchwad

5550

1

Sopan Baug

22

0

Pirangut

3850

8

Viman Nagar

19

-5

Pisoli

4550

8

Vishrantwadi

16

0

Prabhat Road

16900

2

Wadgaon Sheri

16

-6

Punawale

5450

3

Wagholi

11

10

Pune Mumbai Highway

6100

3

Wakad

14

-7

Sasane Nagar

4500

-2

 

 

 

*All prices are per sq ft rates

*Capital values represent quarterly change.

*Rental values represent half-yearly change.


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