Pune real estate 2012: A brief review

Pune may well be termed as the brightest example of realty performance in the Indian context in 2012. Pune real estate market has done well than most of its counterparts in 2012 with average property price appreciation of 7-8% in most of the areas.

The real estate market in Pune has been steady as compared to the neighbouring Mumbai, where sales plummeted in 2012. Areas such as Baner Road, Ambe Gaon, Kawade Road, Bhosale Nagar, etc. have witnessed Quarter to quarter (Q to Q) price appreciation from 7-13%. Rental values have also appreciated in the range of 8-10% in areas like Akurdi, Ambegaon and Baner Road.

Another positive aspect has been the growing number of investors entering the Pune realty market  – both domestic and Non Resident Indians (NRI). Around 40% of the flats being bought in Pune are being used by end users and 35-40% are bought by investors, clearly indicating buyers’ confidence in the appreciating residential sector. And the rest 20% flats have remained empty or unsold during the period.

The absorption of housing units in Pune has been 11% in 2012. The absorption rate remained the same in the previous year too, which means that Pune real estate market has been a stable one. The city saw a steady pace of launches of around 3 million sq. ft a month in the residential segment, with most of the demand emanating for small homes in the outskirts of the city. While there were a total of 5,300 homes launched in Pune in the first quarter of 2012, a total of 6,600 homes were being launched in the second quarter, showing an increase of 24% in number of houses. This portrays a different picture from most of the other cities like Mumbai, Delhi, Bangalore, Chennai and Kolkata, where residential launches came down heavily, as much as 73% in case of Mumbai.

While looking at the real estate scenario of Pune in 2012, the removal of No Objection Certificate (NOC) system by the state government comes as a positive sign. This system required the residential buyer to obtain an NOC from the developer before registering a sales deed. As the process of obtaining the NOC involved an amount of up to Rs 25,000, the removal has been welcomed as it would save cost for buyers as well as sellers who used to share the cost.

The inclusion of 28 more villages into the Pune Municipality Corporation is another positive sign for real estate in the city. As these areas were under the Gram Panchayat earlier, various civic issues like water supply, electricity, transport facility etc lacked proper attention from the municipality and the expending real estate was suffering as result. Now that these localities are included in the municipality corporation, it is expected that real estate will be leaping forward at a rapid pace in the coming year.

Baner, Wakad, Undri, Wagholi and Kharadi are the areas which have witnessed the highest demand. Easy access to the city’s IT hubs have resulted in these areas being the centre of attraction for investors and buyers. Pune real estate market comprises of residential units in both mid range, and luxury apartments and villas. While, most of the demand for luxury segment comes from NRIs, premium housing is bought by the senior management professionals and IT professionals. People living in other Indian cities look upon Pune as an option to settle down in post retirement days and there by the demand for mid range houses has been strong. Demand and appreciation for residential plots are also up in case of suburbs like Hinjewadi, Hadaspar and Talegaon.

The coming year is expected to boost up sales of properties in Pune and like in 2012, steady sales and launches are predicted for Pune in 2013 as well.

Read more real estate articles:

Emerging real estate trends In India 2012

Ahmedabad: The new real estate hotspot

Top real estate destinations in coming 5 years