Commercial expansion and growing population paved the way for a resilient rental market in Pune in Jul-Sep 2019. The homebuying sentiment, however, remained weak on the back of slow-paced infrastructure projects and limited new supply. Despite the festive period, merely 4,500 units were sold in Jul-Sep 2019, implying an eight percent dip in the sales volume, YoY.
Ready-to-move units captured nearly 70 percent of the market demand. The under-construction segment, fraught with delays, continued to vie for attention for the third quarter in a row.
Primary additions suffered as shortage of funds with the developers threw a spanner in the works. Close to 59 new projects were added in Jul-Sep 2019, denoting a 20 percent dip, QoQ. Western locales such as Mahalunge, Baner, Wakad and Pisoli, housed around 70 percent of the fresh supply of residential apartments in the city. Maximum number of new launches were recorded in the affordable segment (within Rs 45 lakh) and mid-income category (Rs 50-70 lakh).
Various measures announced by the Government during Union Budget 2019-20 to enhance access to liquidity for the sector failed to create the desired impact in the current quarter. Nevertheless, the proposed expansion of the Hinjewadi-Shivajinagar metro up to Hadapsar and the upcoming festive period have the potential to put the city’s realty back on the growth track.
Housing sales in Pune dipped in the wake of unattractive festive offers, high property prices and limited number of new launches in Q3 2019. Majority of the developers were engrossed in offloading their existing stock, spelling good news for the city as the residual housing inventory dipped from 18 months in Q2 2019 to 14 months in Q3 2019.
Despite restrained home buying sentiment, property owners in Pune were reluctant to reduce the ‘ask’ rates. Nevetheless, average property prices in the city went up by a negligible one percent, QoQ.
Baner, Aundh, Hinjewadi and Wakad in the West captured maximum buyer interest in the city. Affordable housing grabbed 60 percent of the market demand whereas Mid-Income Group (MIG) and luxury segments captured 25 percent and 15 percent of the total share, respectively.
Vadgaon Budruk, Narhe, Dhankawadi and Kiwale emerged as the market leaders with a four percent growth, each, in the average capital prices, QoQ. While competitive prices sustained housing demand in Vadgaon Budruk, Narhe and Dhankawadi, Kiwale near the Mumbai-Pune Expressway benefitted from its geographical positioning and the proposed Mumbai-Pune Hyperloop.
Average rentals in the city grew by three percent, YoY. Sasane Nagar, Nigdi, Hinjewadi and Punawale emerged as the key performers with 7-8 percent growth in rentals, YoY. Ample supply of ready units, proximity to commercial hubs and comparative affordability to Vishal Nagar, Aundh and Baner drive rental demand to these localities.
While the older projects were marketed with a range of offers, new projects, that were the prime focus of the homebuyers, were launched at 8-10 percent hiked rates. This discrepancy in demand and supply led homebuyers to withhold their investment decisions until the city witnessed price correction or swarmed with discount deals in the festive quarter. Residential offerings by Category A developers, particularly in the western quadrant of the city, performed comparatively well.