Pune’s realty market showed some signs of recovery in Q4 2019 with the addition of 9,000 housing units. This clubbed with infrastructural overhauls, particularly the Shivajinagar-Swargate underground metro project’s commencement, led to a 20 percent growth in the residential enquiries. The quantum of conversions, however, remained a challenge, primarily owning to unchanged property prices against homebuyers’ expectations of downward revisions. Amidst improved supply and limited sales, i.e. 4,500 units, the unsold inventory in the city inched marginally to 96,500 units at the end of the quarter. The number of months required to dispose of the current residential stock stands at 14.
Market sentiment suffered owing to hike in the property tax for residential and commercial units by five percent and 10 percent, respectively. This, along with other dampeners such as growing illegal construction in the city, particular along Pimpri Chinchwad region, kept average property rates under pressure. Nevertheless, a few micro-markets in East and West Pune recorded a 2-3 percent growth in the ‘asks’ rates, QoQ. Metro expansion and increased commercial growth in the IT hubs of Hinjewadi and Kharadi kept the sentiment upbeat in Baner, Balewadi, Wakad and Hadapsar.
While the residential market in Pune hit the road to recovery, a revival is unlikely before H1 2020. The Union Budget 2020-21 would also play a crucial role in shaping the market. Developers eagerly await the establishment of a single-window clearance system and income tax rebates for uplifting home ownership appetite.
The average capital prices in Pune flattened in Oct-Dec 2019. Only, 44 percent of the listed localities recorded an uptrend in the property rates, QoQ.
Supply of ready projects improved in the studied quarter with Baner, Hinjewadi and Kharadi witnessing the maximum number of new project launches.
With MahaRERA revoking registration of two renowned builders in Pune over delayed deliveries, homebuyers’ trust improved manifold. Under-construction units, resultantly, also gained traction; nevertheless, projects by reputed builders remained the cynosure. Noticeably, Grade A developers accounted for 50 percent of the new launches followed by Category B and C builders offering G+15 structures in the ticket size of Rs 60-75 lakh.
Kharadi, Wagholi and Keshav Nagar in East and Hinjewadi, Baner, Wakad and Bavdhan in West witnessed maximum sales. New launches by credible builders helped the areas seize nearly 80 percent of the demand.
Mahalunge along NH-48 emerged as the ace performer with a four percent hike in the average ‘asks’, QoQ. Property prices in Mahalunge stood at 5,700 per sq ft, nearly 15-30 percent lower than the neighbouring Aundh and Baner.
Residential sales in North and South Pune tumbled by a 12- 15 percent, QoQ. Lack of new supply and massive layoffs in the automobile and manufacturing sector impacted sales in Moshi, Chakan, Undri, Chikali, Pisoli, Ambegaon and NIBM. These pockets accounted for 60 percent of the unsold units.
The average rent in Pune grew by four percent, YoY. Kharadi, Bavdhan, Hinjewadi Magarpatta, Tathawade, Mundhwa and Wagholi remained the prime gainers.
Monsoons impacted site visits and housing sales in Pune in Jul-Sep 2019. The subsequent quarter, thus, started with a comparative advantage of change in weather and recorded more enquiries as homebuyers re-entered the market. Starting October, construction pace picked up and supply, too, improved with some project deliveries. Developers announced discounts on new stock to improve sales volume in the festive months. The positive sentiment was, however, counter-balanced by the announcement of an increase in property tax in the State on both residential and commercial units. With developers reluctant to announce price cuts in the city, homebuyers look forward to the Union Budget 2020-21 for improved interest subsidies and tax slab revisions.