After staying in a rented flat for the last two years, Tejas Warudkar, a software professional recently purchased a new flat in Kothrud area of Pune. Though his plans realised now, after waiting for more than four months, he got an affordable deal.
Despite the wait, Tejas was in a win-win situation when he purchased the two-bedroom flat for Rs 20 lakh. On the one hand he received the "long awaited" increment in March/April, on the other the price of his newly bought flat remained stable during the period thereby helping him to manage the monthly budget.
Tejas' example shows that the real estate market in Pune has shifted its northward rise track and instead shown a stabilisation in prices.
"There is certainly a correction in the property prices in Pune. After the city started witnessing sharp rise in real estate prices during the past one-and-half year, the builders were inclined to build ultra modern flats for the upper middle class to make extra money which resulted in a shortage in properties for the middle class. But recently it was again observed that some upcoming and already existing developers have again began exploring the once ignored middle or lower middle class," said Sujay Kalele, Manager, Capital Markets, Jones Lang LaSalle Meghraj, the world's leading integrated global real estate services and money management firm.
"Although the equilibrium between the demand and supply equation has not yet been reached, the gap has narrowed," he added.
AA Swamy, project advisor, High Street Residential Consultants Private Ltd said, "After a sharp rise in the prices in the past two years, buyers had adopted a wait-and-watch option hoping that the property rates going up will stop. The already excessively high prices, in addition to the increased bank interest rates, brought a sense of stagnation in the industry and thereby forcing the builders to stabilise the rates."
As the city's mid-segment real estate market is mostly driven by the information technology (IT) clients, there are new avenues coming up as favoured destinations close to IT companies. The city, which earlier was spread within a radius of 15 to 20 kilometers, has extended to 30 kilometers.
"Declining property rates in other big cities forced the buyers of Pune to wait in anticipation of a similar trend. This brought a stagnation in the market, halting the continuously growing prices," said the President, Promoters and Builders Association of Pune (PBAP). He added that the trend is being witnessed from March-April and will continue for some more time.
Sunil Kulkarni, a city-based developer said, "Eight months back, I decided to build a new project at Karve Road. Despite the huge demand, the prices have not picked up. I opened to sell at Rs 5,000 per square feet. The rates are same after three months."