Accommodation Times News Services
By Arvind Jain, Pride Group
The National Housing Bank’s Residex recently confirmed that up to March 2015, price appreciation for residential properties continued to be the highest in Pune among the 16 cities its monitors. In fact, all other large cities have been showing a decline in property valuations. The NHB mentioned Pune’s inventory of unsold residential stock as 13 months’ worth, which is very low when compared to other cities. This is because consumption of residential real estate in Pune continued to be healthy even during the lowest point of the national real estate slowdown.
There can be many reasons for unsold inventory – muted market sentiment, a lot of supply being in the early stages of construction, housing projects being constructed in the wrong locations, and over-pricing. In Pune, some supply is undoubtedly in locations which have not picked up because of lack of infrastructure, and there are also quite a few projects where developers have been too adventurous in their pricing. The fact that Pune continues to perform better than other cities on appreciation indicates that most investors have navigated away from the non-lucrative propositions.
In any case, Pune’s outstanding performance does not come as a surprise, and it vouchsafes the unwavering confidence that end users and investors have been exhibiting in Maharashtra’s most dynamic economic powerhouse. The trend of Pune’s real estate market performing against the larger odds and out-distancing other cities in terms of real estate vibrancy will definitely continue.
With the combined effect of manufacturing, Information Technology, the services sector and hospitality providing impetus to Pune, the city has all the right economic and demand drivers firmly in place. Moreover, its inclusion in the 100 Smart Cities program has served to boost the interest from multinational companies to set up and expand operations here. This will serve to further increase inward migration and fuel greater demand for residential real estate, and provide end-users and investors alike an outstanding rationale to place their faith in this market.
Pune has come a long way over the past two decades. Today, there are few cities in India which can compare to Pune’s potential as a real estate investment destination. Because of its unique confluence of economic drivers, this city will continue to perform and surpass other cities in both the near and long term. Investors are reaping generous rewards for intelligent plays in Pune’s growth pockets, and the city’s boundaries are constantly expanding to open up new real estate investment precincts.
In fact, the burgeoning townships culture in Pune is one of the primary reasons why this city continues to be in the investment limelight. While other cities wrestle with their mounting infrastructure woes, Pune’s more prominent developers have identified integrated townships as the ideal way to provide a brand-new way of life to the city’s residents. Having identified this opportunity, they have acquired large land parcels in locations towards which demand is being pushed from the over-crowded core areas and launched townships which offer all the comforts and conveniences of modern living.
Thanks to the huge demand for township properties, these mega-projects are drawing the maximum interest from investors not only from within the city and the state, but from all over the country and also from the NRI community abroad. It is pertinent to mention that the highest number of Non-Resident Indians employed in Information Technology companies abroad originate from Pune. Upon their return, these NRIs are looking for a lifestyle consummate with the one they have become accustomed to in their current countries of residence. Pune’s integrated townships are the obvious answer for them.
Another factor that works in Pune’s favour is that the city offers investors a wide bandwidth of budget categories that they can invest. Investors who time their plays intelligently and do sufficient research before investing are seeing very generous returns. However, it is also important to note that not all property investments in Pune will yield the same results. In order to benefit from one’s investment, it is important to know how each of the city’s sub-markets work, what kind of demand they are drawing, and how well infrastructure and connectivity support their future growth prospects.
Investors into Pune’s real estate market must also be alert about the legal antecedents of projects and their developers, especially in the cheaper outskirts. The high incidence of illegal residential constructions on Pune’s peripherals is no secret, and there is no shortage of unwary investors and end-users that have fallen prey to them. Conducting a complete background check on developers with no established market record, and a thorough due diligence on the legality of their projects, is extremely important.