The residential market in Pune that was already suffering from the Non-Banking Finance Companies (NBFCs) crisis in 2019 bore a massive brunt post the rapid spread of the novel Coronavirus in March 2020. The nationwide lockdown till May 2020, upset the demand-supply dynamics as the annual housing sales in Pune dropped by around 42 percent in H1 2020, as against H1 2019. New launches also plummeted by approximately 37 percent in the first half of the year against the same period in 2019. Amid poor offtake of residential units both in the primary and the resale markets, the unsold residential stock at the end of Apr-Jun 2020 grew by over 10 percent and stood at around 45,000 units. The average price movement remained restricted with a minute 1-2 percent change in select pockets.
While consumers adopted a cautious stance in H1 2020, the second half of the year witnessed some improvement in deal closures. A significant cut in stamp duty in August, coupled with other sentiment lifters such as the expanding metro network, unchanged lending rates, several offers by developers and digitalised sites visits boded well for the sector. Ready homes remained the prime choice due to their exemption from GST and lower registration cost. Construction activities also gained some pace around Q3 2020, with workers returning to project sites, and improved supply chain of raw materials. Maximum number of new launches were seen near transit nodes of Mumbai-Pune Highway and Bangalore-Pune Expressway.
* Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
Noticeably, the realty market of Pune was seen lifting itself up by the third quarter of 2020. However, developers are still looking forward to some construction-friendly policies to bring down the cost of construction, which has gone up significantly during the COVID-19 crisis due to the high capital cost and stringent lending norms adopted by financial institutions.