Pune’s real estate market is pulling itself out of the doldrums of the slowdown. Over the last three months, buyers have begun populating the residential market again and are beating a path to various developers’ sites in search of good deals.
While Pune’s real estate market was in the deepest throes of the downturn, the 1BHK and studio apartments were practically the only moving products. Today, general buyers preferences have once again evolved to 2-3BHK flats. The most popular price tags currently fall within the range of Rs. 25 to 65 lakh.
The slowdown had brought about residential space affordability and availability in areas that were previously out of reach for middle-income buyers. Due to reduction in pricing, residential property buyers because of a choice of attractive deals in preferred areas like Baner, Wakad, Kondhwa, NIBM Road and Aundh.
There was – and continues to be – considerable demand for projects along the now vital Nagar Road, which now represents a new IT/ITES growth zone. Investors are looking at properties on Nagar Road because of its high future appreciation potential.
Projects that were put on indefinite hold during the financial crunch are now seeing the light of day, with construction once again on evident across the city. Projects that are due to be launched within a six-month time frame are being advertised heavily.
On the downside, we have been seeing the first stirrings of price escalations in Pune. Based on the fact that the demand revival is still in its infancy, this represents a worrisome scenario which seems to indicate that the slowdown did not deliver a sufficiently convincing message. Owing to the price-conscious buyer profile that generally defines Pune, demand for residential spaces will only continue to grow as long as rates remain rational.
I have confidence in Pune’s real estate market in the mid-to-long term. In a few years, Pune will necessarily have addressed some of the more pressing problems its is facing today. I expect that our town planning authorities will have woken up to the fact that urban planning and development must factor in the city as a whole, rather than in terms of segments.
However, before this happens, increased FSI in some locations and not in others will result in high-rise buildings in these pockets – along with all the implied infrastructure challenges – while slum issues will finally have to be addressed in others. These issues should ideally lead to major amendments at the blueprint stage, and also massive redevelopment of certain areas.
Of course, it will take a long time to tackle all problems such as inadequately maintained roads, insufficient drainage and severe shortfalls in terms of water and sewerage networks. However, it is certain that there will, in the long term, be less lopsided real estate growth, and that the city will have a more uniform growth pattern.
I expect that the PCMC area will risen to prominence over the next five years, owing largely to the planned nature of its development pattern. Currently, the highest degree of Pune’s urban sprawl is along the national highway, with the density of land development declining with distance from the highway.
Eventually, Pune’s urban sprawl will have been regularized, with at least some of the infrastructure necessary to develop and sustain new areas put in place.
Avinash Gokhale is Director – Marketing & Corporate Planning, Pharande Spaces – a leading construction and development firm operating in the PCMC area of Pune, India.
You may reprint or quote this article with full credit to the author and a link back to PunePropertyBlog.com