Demand exceed in real estate market of Pune
The demand has exceeded the supply in the market of residential property in Pune. Driven largely by demand from young professionals who are coming to work in Pune. As today, the real estate market of Pune has maintained the number of units constructed per year between 28-35,000.
The experts discussed a range of queries raised by consumers on Open House. Questions raised from and affordable and luxury housing, housing demand, how long to stay invested in Pune and sectors that were driving demand in the real estate market.
Despite the slowdown during 2008 to 2010 real estate market of Pune remained stable and continued to develop 30,000 to 32,000 housing units per annum. Major buyer segment is the young IT Professionals working in sunrise industries such as retail, IT-ITES, hospitals, biotechnology, automobiles are among few. Statistics show that though women are not main buyers but in most of the affluent areas like Baner, Aundh, Pashan Road are few among others are the areas which are in the employment catchments, 7 to 11.5 percent are women buyers.
In Spite of a slight increase in prices of property in Pune and substantial rise is in interest rates the demand has been strong in Pune. Year 2010, December shows that 75% of the entire stock was sold out so only 25% was available and June 2011 was at the 78% sell off. Despite of the new stock being brought in the percentage sell-out has gone up, clearly indicating that demand is exceeding prices.
While the construction costs have gone up by almost 30% the prices have gone up by only 15%. Patrons are taking loans and entering the purchase cycle early. By the time the construction ends only 5% of stock is left. As the prices do not change so dramatically at possession. Buyers have been to be maxing out their capacity to buy in an under-construction property in Pune at an early stage.
One of the main concerns was raised that charges such as Value Added Tax (VAT) and service tax form part of the additional costs of buying a property. These are mandatory charges levied by Central State or Municipal authorities. However, the extra charges are related to tax, the home buyers needs to go back to the Agreement on whose liability additional taxation is.
Addressing the woes of a common man looking for an affordable options, the concern were raised that the government thinks it is only the rich who can buy apartments. They are not realizing that the same laws are applicable for the common man also. Sooner or later, these people will not be able to afford property in Pune. Ultimately, we will not have an affordable housing options.
Investors who are seeking best returns out of property investments, as said, users needs to remain invested for 5-7 years for best results. Purely as an investment, we don’t think that we can rule out a whole status like luxury. If investing for an annual income and capital appreciation, then your annual returns can be very decent in Luxury property with 4.5% annual return for a Pune Property. Should be buying the right property and think of holding on to it.
In Pune the demand of luxury housing is increased because the developers concord that luxury keeps re-inventing relying upon the buyer’s expectations. A feature like rain shower or shower panel in a very house, the developer installs such a facility in their upcoming comes solely when seeing a substantial demand for such options.
Pune market has maintained the quantity of units created per year between 28000-35,000.
In spite of a small increase in costs and substantial rise in interest rates, demand has been sturdy in Pune
Users have to be compelled to stay invested for 5-7 years for best results
whereas construction prices have gone up by virtually 30% the costs have gone up by solely 15%.
PropTiger is an independent real estate advisor with a pan-India presence. We aspire to be your first port of call if you want to buy a property in Pune.