Metro rail development work to commence soon
Hinjewadi-Shivajinagar belt is set to witness an infrastructure facelift as the ground work on the third line of metro proposed between the two areas will commence soon. Pune Metropolitan Region Development Authority (PMRDA) has already begun the land acquisition process, resulting in an increased interest from commercial and residential investors in the region.
Mahalunge-Maan receives a new development plan
PMRDA proposed a development plan for Mahalunge-Maan region to curb the rampant illegal construction. The town planning scheme sprawls over 729 acres of land and spells development work for both residential and commercial purposes, providing a massive fillip to an important area adjoining NH-48.
RERA evokes positive market sentiment
Implementation of Maharashtra-RERA amended realty sentiments across Pune. Project launches and property registrations, which were subdued post demonetisation, gained traction after the effective execution of the biggest structural reform in the real estate sector. A 15 percent hike in the revenue collection has been reported by the registration department until November 2017 over the same period in 2016.
Quality retail spaces lure global luxury brands
Many international brands have identified Pune’s potential as a model city to expand their retail footprints in the city. With increased supply of quality spaces, global brands such as H&M, IKEA, ZARA, Gent, Brooks Brother, Superdry and MAC are expanding their retail stores in Pune. Besides, Walmart is also considering suitable locations to establish its stores.
Shedding its unorganised and fragmented nature post MahaRERA implementation, Pune’s residential market witnessed a turnaround after three quarters of slowdown. With builders acclimatising and re-orienting their businesses as per the changing environment, the market reported consolidation in Q4 2017. The city also reported a marginal growth in sales due to a seven percent correction in property prices, YoY.
Stalled projects regained momentum, accompanied with several new project announcements in areas driven by infrastructure growth and dotted with IT hubs. However, a paradigm shift ensued. Of the total inventory supply, affordable homes remained the flavor of the season and garnered maximum interest from the developer community. Many reputed builders were seen shifting their focus from less popular premium residential units to affordable projects to tap the growing demand.
While gross value of inventory sales remained low, it is likely to pick up pace in 2018 as more fence-sitters are anticipated to spring into action. Overcoming all odds, the city managed to report a 15 percent hike in the revenue collection until November 2017, and the value is expected to grow manifold with the improving market sentiment. Industry stalwarts believe that the year 2018 will witness increased investment inflows backed by augmented regulations, ease of doing business and better accountability by stakeholders.
Overcoming the shadows of the past, the subdued housing market of Pune reported a revival in sales in Oct-Dec 2017 as against the previous quarter. Correction in property prices along with other economic growth drivers and infrastructure projects remained the key benefactor, particularly in the emerging areas.
- Pro-market regulatory norms such as RERA and Goods and Services Tax (GST) have started setting a positive momentum in Pune’s realty landscape. Affordable housing, closely followed by mid-income segment, remained the highest selling category in the city in Oct-Dec 2017.
- As homes within Rs 40 lakh remained an attractive proposition, many developers were seen reducing the average property sizes in their upcoming projects to overcome high land costs and meet buyers’ investment appetite. However, like the previous quarter, ready-to-move inventory was the most preferred of the lot.
- New launches remained low - 1,400 units this quarter, compared to the same period a year ago. Nevertheless, supply was evenly distributed in popular areas of the city. Hinjewadi, a prominent IT hub in the western quadrant, vouched for maximum new supply in the quarter with capital prices averaging around Rs 5,600 per sq ft.
- The average capital appreciation across micro-markets remained tepid at 3-4 percent.
- Amongst the tracked localities, Lohegaon registered a maximum hike of five percent in the average capital prices in Q4 2017. The locality benefitted on account of spillover demand from its neighbouring premium locale of Viman Nagar, proximity to city airport and affordability.
- Following suit, Hadapsar, Chikhali, Mundhwa and Dhanori were other key micro-markets that witnessed an average capital appreciation of three to five percent, each, QoQ.
- The rental market reeled under pressure. However, pockets closer to IT parks fared well with robust demand from the tenant community. Aundh and Hadapsar in adjacency to Hinjewadi and Magarpatta, respectively, remained preferred micro-markets and reported an annual rental hike of 7-8 percent, each, YoY.
Unlike the previous quarter, Pune’s residential market picked up momentum in Q4 2017. Backed by improved market sentiment, developers were seen announcing new projects close to IT hubs, particularly in the outskirts of the city. Overall, augmented realty dynamics lured realtors back into the market and moderately abridged the prevalent demand-supply mismatch.
- Reviving the fortunes of a flagging realty sector, affordable housing contributed to 52 percent of the residential demand in Pune. After a temporary lull, the segment regained traction backed by smooth and timely implementation of MahaRERA. However, developers still reeled under pressure to cope with the challenges extended by RERA.
- The second most popular segment, mid-income housing, reported marginal recovery. Additional supply of units priced between Rs 40 lakh and Rs 60 lakh, though by a marginal share, could be attributed to the resurging popularity of under-construction units against the backdrop of buyer-friendly norms.
- The preference for high-income and luxury units fell in the quarter ending December 2017. With market in its recovery phase, investors and buyers refrained from entering high-stake deals. However, sentiment in these budget segments is likely to improve in the ensuing months.
- Ultra-luxury properties pegged at Rs 2 crore and above reported slight alterations. While overall demand remained unchanged, supply dipped by a small margin. With no big deals reported in the city, the trend could be largely owing to owners withdrawing their properties from the market.