10, Jul 2024
Pune’s Real Estate Boom – Is Now the Perfect Time to Invest?
By-Akash Pharande, Managing Director – Pharande Spaces
Pune, one of India’s most vibrant real estate markets, has experienced rapid changes over the past few years. Latest data from leading real estate consultancies show a scenario of strong housing price increases and ongoing changes in market dynamics, pointing towards further price hikes in the future.
According to real estate consultants Anarock, Pune and the Mumbai Metropolitan Region (MMR) saw over 50% of the overall housing sales in Q2 2024 among the top seven cities. This is a resounding statement for Pune — a city once considered the laid-back cousin of the financial capital and is now competing in the same league.
Rising Property Prices: A Continuum
Recent data from various leading consultancies clearly show Pune’s trend of rising property prices. There has been a significant 20-23% year-on-year increase compared to Q1 2023. This resilience and rising demand are driving prices higher. Several factors explain Pune’s growing housing prices
– Economic Growth & Employment Opportunities: Pune’s real estate market has improved significantly due to its development into a major IT and manufacturing center. High demand from professionals seeking homes near their workplaces has led to a surge in property values in and around IT parks and manufacturing hubs.
– Infrastructure Development: Ongoing and planned infrastructure improvements such as road extensions, new flyovers, and the Pune Metro are boosting the city’s property values and connectivity. This dynamic is evident across Greater Pune, which includes the Pune Municipal Corporation (PMC) and the infrastructure-driven Pimpri-Chinchwad Municipal Corporation (PCMC).
– Shift in Housing Segments: Pune’s housing market is now driven by mid-range and premium-to-luxury housing, thanks to higher demand for such options. The higher purchasing and borrowing power of the target clientele supports ongoing price increases.
So – Buy Now or Later?
To answer this very important question, it is necessary to consider some fundamentals. Pune’s strong economic growth draws professionals and families from various industries. The city offers a high livability quotient, better housing affordability, and a superior climate compared to neighboring Mumbai. It also boasts top-grade healthcare and education options and proximity to Mumbai, Maharashtra’s main economic hub.
Pune has delivered an overall residential price appreciation of well over 20% in just one year. Naturally, both end-users and investors find the city very appealing, especially considering its rapid growth since 2020, which saw Pune’s lowest year for housing demand in the last decade due to the COVID-19 pandemic.
Job losses, economic disruption, and the disappearance of construction labour brought building activity to a halt. The lockdowns caused a significant decline in real estate market demand and supply.
But in 2021, the market began to bounce back powerfully. With a 17% year-on-year increase, Pune saw the highest property sales since 2013. Buyer confidence increased steadily. In 2023, the Pune housing market rebounded remarkably. The current year is poised to set new benchmarks.
The writing is clearly on the wall — there is no stopping the Pune housing market, and a wait-and-watch stance can cost buyers dearly. For those who want to buy a home in Pune, either to live here or to reap investment returns, there is a strong argument for acting now. Historical data and current patterns clearly imply that the city’s property values will keep rising.
Given the continuous growth of the city and its expanding economic base, homes bought now will deliver significant value addition over time. Pune is currently second only to Mumbai in new residential launches and sales and is also attracting increasing interest from institutional investors eyeing its commercial real estate market.
This means more workplaces, more jobs, and even higher housing demand driving prices steadily northward. For potential buyers and investors, the message is clear – there is no equity in waiting for a more opportune time in Pune’s thriving housing market.
About the Author:
Akash Pharande is Managing Director – Pharande Spaces, a leading real estate construction and development firm famous for its township projects in Greater Pune and beyond. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer of townships in the region. With the recent inclusion of Puneville Commercial into one of its most iconic townships, Pharande Spaces taken a major step towards addressing Pune’s current and future requirements for fully integrated residential-commercial convenience
- 0
- By Rabindra
21, Mar 2024
General Elections – Will the Housing Market Create Another Peak in 2024
Mumbai 21 March 2024: General elections and residential real estate appear closely linked – at least, that is what the previous two election years’ data trends indicate. 2014 and 2019, both election years, saw housing sales create new peaks. In 2014, sales in the top 7 cities scaled up to approx. 3.45 lakh units while new launches were the highest ever at nearly 5.45 lakh units.
Likewise, in 2019, housing sales scaled up to approx. 2.61 lakh units while new launches increased to approx. 2.37 lakh units after a lull in the residential real estate market between 2016 and 2019. Major structural reforms like DeMo, RERA, and GST, introduced in 2016 and 2017, transitioned Indian real estate from something of a Wild West frontier market to more organised and regulated.
Most fly-by-night developers have exited the market since then and organised players have emerged in strength, significantly reviving confidence among homebuyers.
Anuj Puri, Chairman – ANAROCK Group, says, “A major factor driving the housing market’s phenomenal performance in 2014 and 2019 would have been the decisive election results. For homebuyers, it was an end to fence-sitting and a confident move to ‘buy’ positions.”
On examining the price trends in these election years, it emerges that 2014 was a better year than 2019. ANAROCK data indicates that in 2014, the average prices in the top 7 cities rose by over 6% annually against the preceding year – from INR 4,895 per sq. ft. in 2013 to INR 5,168 per sq. ft. in 2014. As for 2019, average prices rose by merely 1% annually – from INR 5,551 per sq. ft. in 2018 to INR 5,588 per sq. ft. in 2019.
India’s residential real estate sector witnessed a major slowdown between 2016 to 2019. The major market shake-up brought on by policy reforms between 2016 and 2017 was followed by the NBFC crisis post the IL&FS issue in 2018. This caused considerable turmoil in the residential real estate industry.
From 2019 onwards, the first green shoots of revival were temporarily dampened by the pandemic in early 2020. Thereafter, against all expectations, the housing market went into overdrive from 2021 onwards and the momentum continues till date.
How will the current election year (2024) pan out for the Indian housing market?
“As things stand now, all signs currently favour the residential market in 2024, and the year can well create another peak in housing sales and new launches,” says Puri. “Housing demand continues to be upbeat across cities after the announcement of the election dates, with homebuyers remaining highly optimistic about the real estate market.”
Factors Favouring a New Peak in 2024:
- Most real estate regulatory reforms and norms are already in place, and the worst of the shake-up is behind us.
- International organizations like IMF have strong GDP growth predictions for India for the next few years. The Indian economy is growing rapidly, and this indirectly has a positive impact on the real estate market.
- Inflation is currently well under control, bolstering financial optimism and confidence among homebuyers.
- Based on growing homebuyer demand, developers have closed substantial land deals in the last one year, and most of their balance sheets are clean. Many large developers with good track records and solid balance sheets are venturing into newer territories to increase their presence.
