Average rates of residential apartments in Pune real estate market, the information technology hub of Maharashtra, have risen 11 percent from Rs 5,208 per square foot in June 2022 to Rs 5,782 in June 2023. On the other hand, apartment sales in Pune have gone down by 8 percent in the last 12 months, according to a research report by Gera Developments, a real estate developer in Pune.
Along with it, a report released by Knight Frank India, a real estate consultancy, said that the average pricing per sq ft in Pune increased 3 percent on a year-on-year basis.
Boom and consolidation at the same time
The GERA residential report for June 2023 said the Pune real estate market is showing signs of both boom and consolidation. There has been an across-the-board increase in the rates of new projects, existing phases of old projects as well as new phases of old projects, it said, adding that this indicates a strong demand as homebuyers are purchasing homes at higher prices.
Conversely, there has been an 8 percent decline in overall sales, dropping from 105,625 units between June 2021 and June 2022 to 97,214 units from June 2022 to June 2023.
This could be explained by the increase in home prices and increase in interest rates. The increase in prices and the corresponding reduction in demand are normal indicators of a bull market.
Further, the GERA report said that over the past year (June 2022-June 2023) 93,734 new homes were added to the overall inventory. This is down from the previous year’s new inventory of 115,996.
"Looking forward there are two scenarios, if developers bring in substantial supply, we could witness an oversupply since sales numbers have eased off from earlier highs. On the other hand, constrained supply at the current equilibrium levels could see a continued steady rise in prices," Rohit GERA, Managing Director of GERA Developments, said.
"These are very divergent paths and while we will not make a prediction about which way the market will go (up or down), we can disclose our strategy is to approach this market with optimism. We believe that reputed developers will see greater demand. In case of an oversupply or a slowing market, homebuyers will shift faster to well-capitalised developers with a proven track," he added.
Further, the annual price rise in Pune has been in the range of 1 percent to 4 percent on average depending on the area, according to the Knight Frank India report. The highest average price rise of 4 percent was seen in areas like Hinjewadi and Wakad followed by areas like Kharadi, Kothrud and Undri which saw a 3 percent average price rise in the last 12 months.
Also read: Is the Pune real estate market going the Mumbai way?
Launches
During H1 2023, the new launches in Pune rose by a significant 22 percent year on year, resulting in a total of 21,234 new units. Of all the markets, only Pune achieved substantial double-digit growth in project launches during H1, according to the Knight Frank India report.
Sales
In the first half of 2023, the Pune residential market remained stable as it recorded total sales of 21,670 units, experiencing a slight decline of 0.6 percent YoY. Despite facing various challenges, the market demonstrated resilience, as reflected in the steady sales figures for H1, the Knight Frank India report said.
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