Compact houses ruling the roost in Pune, finds survey by Knight Frank
The total unit of sales recorded in the residential segment in 2018 was 32,684 units.Updated: Jan 10, 2019 08:48 IST
The Pune office market has been reeling under an acute supply crunch over the last three years, as supply was not keeping up with the demand. There were several transactions in this period that were put on hold due to lack of required supply. However in H2 2018 (Half Two - fiscal year second half), the city witnessed the addition of a record 4.2 mn sq feet of supply. This is the highest amount of supply added during any half-yearly period over the past six years. The entire year of 2018 witnessed an addition of a record 6.9 mn sq feet supply, which is the highest in the current decade for Pune city, according to the report released by Knight Frank India, a independent global property consultancy.
In the residential segment, affordable housing and compact home segments dominated the launches in the city. The total unit of sales recorded in the whole year of 2018 was at 32,684 units. As the residential market performance has been weak over the past few years, there has been a special focus by developers to make the purchase less strenuous on buyers. Apart from reducing prices, developers are constructing compact homes to mitigate the impact of high prices. While developers have cut prices, buyers are still finding the existing prices to be high.
Terming it a robust growth, Paramvir Singh Paul, branch director, Knight Frank, Pune said, “The city has witnessed the highest growth in property launches in a decades’ time. This was largely on account of healthy demand from occupiers and pre-commitment transactions. This year also created a record in terms of areas transacted. In the residential segment, growth was seen in the 'Pradhan Mantri Awas Yojana’ (PMAY) led affordable housing segment and in the compact homes segments. Sales grew marginally but goods and services tax (GST) on under-construction buildings continued to act as a deterrent for buyers.”
The real estate sector has certainly come out successfully from the transit phase of the reforms by the central government such as demonetisation, GST and Rera, which is one of the major reasons behind the incredible growth in the sector, said Vivek Rathi, senior vice president (Research) of Knight Frank.
“The real estate sector had faced decline in growth owing to the back-to-back reforms taken by the central government of India. In the transit phase of reforms, the businesses are bound to slow down which is what happened. The real estate struggled to keep up with the pace of work in 2016 and 2017.”
However, now with the revival of the market, the real estate sector is most likely to witness a boom in the near future, said Rathi.
According to the Knight Frank India report, one of the major challenges before the real estate sector is to achieve a significant growth rate in the sales of the units ( residential and office) in Pune.
“While the new launches are back in the Pune market, the spurt in the launches has not translated into a significant growth in the sales yet. The supply has increased while the demand is less. The real estate sector poses a major challenge in dealing with this situation. While the ratio has always been the same, however, a balance between this needs to be created” said Rathi.
Pune builders have this to say....
The real estate sector is struggling to revive in the city. Not only in the office sites, but also in the residential housing, stagnancy exists. Post the reforms, all consumers are going ahead with projects having ready occupation certificates.
SHRIKANT PARANJAPE, chairman, Paranjape Schemes
Early 2018 was better than 2017, balanced reality in terms of housing rates, people could start moving a bit. Second half fared better. I am hoping for a better year than 2018.
HEMANT NAIKNAVARE, director, Naiknavare developers
2018 witnessed higher demand for office segment in Pune with absorption and precommitments, the latter accounting for 65% given the dearth of ready supply.
VIVEK RACHH, director, Corporate Solutions, Panchshil Realty