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Pune’s real estate slow, weak but not a complete slump: Knight Frank report
The economic slowdown has shown ripple effects in Pune’s real estate sector as the residential sales have gone down by 10 per cent in the second half of 2019, and by two per cent in the entire year, according to property consultant Knight Frank.
Releasing its latest report, India Real Estate: H2 2019, Knight Frank says that Pune’s real estate has been slow and weak, but not in a complete slump.
The report which is a comprehensive analysis of the residential market performance across eight major cities for the July-December 2019 period, said that the residential property market in top eight cities recorded a growth of one per cent year-on-year in sales volume in 2019. Housing sales increased in Delhi-NCR, Bengaluru, Chennai, Hyderabad and Ahmedabad, but dropped in Mumbai, Pune and Kolkata.
Home sales in Pune declined by 10 per cent year-on-year to 15,445 units in second half of 2019 and by 2 per cent to 32,809 units in the entire year, while home launches in Pune witnessed a 37 per cent rise to 44,660 units in second half of 2019 and 25 per cent year on year to 15,445 units in the entire year.
Pune also saw 86 per cent of new launches in the bracket of less than Rs 50 lakh which predominantly states that the buyers are buying homes to live in and not for investment purposes.
“Buyers in Pune prefer to compromise on the size, than on the location. Pune west and north areas are gaining more visibility in terms of buyers buying homes to live in,” said Paramvir Singh Paul, branch director, Pune, Knight Frank India.
In Pune, 91 per cent launches were in the less than Rs 75 lakh bracket, according to the report.
“Developers are continuing the concept of compact homes. In the five year period, which is between 2014 and 2019, the average size of the apartments in Pune has shrunk by 26 per cent,” added Paul.
The reasons cited for the slow growth in Pune’s realty sector were that the consumer sentiments were affected by the slowdown in the economy. The state and national elections in 2019 have also had their share of impact in deferring the purchase decision of homebuyers, hence, the city witnessed a difficult year in residential sales.
According to Paul, “The Indian economy has faced a challenging year in 2019 with the GDP growth rate slowing down to a six-year low and the resultant impact being witnessed across several industries. The residential segment in Pune faced a challenging year with sales declining by 2 per cent in 2019. With consumer confidence on a steady decline, homebuyers are sceptical to make long-term big-ticket commitment, like purchasing a house. The government has been proactive to revive the economic growth. We are hopeful that these efforts would yield results soon and lead to a broad-based recovery in the real estate.”