2015: Realty Outlook for Pune The dream of every Indian of owning a home now has a twist. The dream of every Indian now is to own a home, cradled in luxury, state of the art amenities, connectivity and yet, at an affordable rate. In spite of the ever increasing property rates along with the rising demands of the picky consumer, Pune manages to cater to their needs. Rapid urbanization in the city has made Pune an IT hub which means an influx of young and aspiring individuals migrating to the city from all over the country. Due to saturation of projects and sky-high property rates in the main city, Punekars find homes of their tastes choices and preferences in the suburbs of the city. Areas such as Baner, Wakad, Balewadi, Pashan and Kondhwa have witnessed a number of new launches this year. One of the areas to watch out for that has undergone noteworthy transformation to swiftly escalate to the position of one of the ideal locations to own a home in Pune is Balewadi. The reasons for this escalation is quite simple. The upsurge in the employment opportunities that have been thrown open due to rapid pace of growth of its IT/ITeS and manufacturing sectors in and around the city has ensued in a significant boom in real estate development with a whopping year-on-year double-digit growth in the number of people migrating into the city in search of attractive prospects. Needless to say, an increase in the population would result in an increase in demand for residential property. In the next 12 months, prices in Balewadi are expected to grow by 20%. Given its proximity to the Hinjewadi IT Park, Balewadi is one of the developing real estate areas of Pune. With proper planning of the area by the authorities, the area is now listed among upmarket residential locations in the city. The annual statement of rates or the Ready Reckoner 2015 – property prices in Pune which have been increased by 15-25% and land rates which have been increased by 20% to 100% may have a wait-and-watch impact on home buyers which will consequently affect the real estate sector in Pune. It is the private housing sector that is pointed out as a key growth area by the PWC report.This year, in the mid-end segment, values appreciated in the range of 6–10% in Aundh, Wakad, Balewadi, while there was a Y-O-Y price growth of 10-20 % in the premium segment. The annual rise or fall in the demand for property is likely to be misread as an indicator of a strong or weak market. However, the comparison of absolute numbers to the number of new launches annually cannot form the basis to understand the health of a market or its effect on the price. We must remember that the demand and supply of a commodity, or in this case, property is influenced by a number of independent variables like the economic growth, market sentiment, the interest rate, income growth, etc.
PWC’s latest report states that India will witness an increased economic growth, and the removal of barriers to FDI will provide impetus to the demand for construction over the coming 12 – 18 months. We are optimistic that Pune too will ride this growth wave. The RBI rate that has been slashed down by 25 basis points from 8 % to 7.75% and the reverse repo rate which has been brought down to 6.75% from its earlier rate of 7% is definitely a pleasant news for the real estate sector. This move by the RBI indicates lower-than-expected inflation. With this move, the year 2015 will see growth led by investments, which consequently spells growth for the real estate sector as well. Additionally, the revised FDI norms, which allow an investor to exit on completion of the project or after three years from the date of final investment will open up new avenues for the Real Estate sector. The reduced commitment and risk involved in dealings will encourage foreign investors to provide funding for starting projects in India. The relaxed norms which will source the required capital and easy procurement of loans. Vishal Nahar, Director, Eiffel Developers and Realtors Ltd The views expressed in this article are author´s own
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