Pune: Despite registering a nine per cent drop in residential real estate launches, the market has witnessed a 11 per cent growth year-on-year in sales for the first half (H1) of 2017.
Pune market has fared better compared to other cities because developers have given discounts and freebies on unsold inventories rather than focusing on new launches. These trends were revealed in the Knight Frank India Real Estate Residential and Office January-June 2017 survey.
Dip in new launches
The survey stated that new launches in Pune have witnessed a historical low due to the after-effects of demonetisation, compliance work under the Real Estate Regulatory Act (RERA) and unsold inventories. “In H1 of 2017, number of launches stood at 7,905 units, which is nine per cent lower than H1 of 2016 and nearly 30 per cent lower than H2 of 2016. The first two months of 2017 saw the industry grapple with the aftermath of demonetisation, followed by the implementation of RERA. Focus on exhausting the unsold inventory has led to a receding unsold inventory level, which dropped to around 40,000 units in H1 2017 from a peak of 71,000 units in H1 2014. The quarters to sell (QTS) for the unsold inventory has also dropped from 5.1 to 4.5 quarters,” said Senior Branch Director - Pune, Shantanu Mazumder.
Low Home Loan rates
Mazumder added that lower home loan rates is another driving factor for the increased sales. “Home loan interest rates, at around 8-8.5 per cent, are at the lowest since 2009. This, coupled with freebies offered by developers to attract demand and availability of unsold ‘ready for possession’ units, has led to an improvement in housing sales,” he said.
He said Pune’s weighted average price has stagnated at Rs 4,860 per sq ft for the last one year. Mazumder said that though under pressure, the Pune market has been able to maintain sales unlike other major cities in India.
“In another month or so, we will see things moving in the Pune market. Pune and Maharashtra in general will come up really fast and will be among the first cities to come out of the red,” he said. Area-wise market
Mazumdar said East and West Pune witnessed the maximum number of launches in H1 2017 while South Pune witnessed the highest jump in sales figures. “There has been an equal traction across all micro-markets in Pune barring central Pune, which includes premium localities like Koregaon Park, Bund Garden Road, Erandwane, Deccan, Kothrud and Model Colony,” he added.