What Lies Ahead for the Pune Property Market
Pune’s real estate market is the stuff of legend, and justifiably so. All the five main verticals of the property sector – residential, commercial office space, retail and hospitality – are performing optimally in Pune. This is by all standards an exceptional real estate market. Moreover, Pune is always growing and adding to its geographical spread, making it by far the largest and most vibrant real estate market in Maharashtra and beyond.
Therefore, it comes as no surprise that investors from Mumbai, dissuaded by the high property rates and slow market conditions in the financial capital, are extremely active in Pune. Apart from these, there is a constant flow of investments coming in from other Maharashtrian cities like Nanded, Nasik, Sangli, Kolhapur, Nagpur, Jalgaon and Amravati. As a result, the Pune property market is extremely resistant to stagnation.
Know what drives demand
The huge degree of job creation the city’s manufacturing, automobile and Infotech and services sectors is causing inward migration from almost all parts of India and very rapid absorption of commercial office spaces. This, in turn, is constantly ramping up residential property demand as well. Additionally, thanks to its many educational institutions, Pune boasts of constantly replenishing talent pool which fuels the growth of all the sectors active in the city.
Because of the multidimensional growth drivers that the city enjoys, the Pune residential property market is quite resistant to the severe demand fluctuations being seen in a number of other cities. However, successful investment into the Pune residential real estate sector still calls for knowledge about what works, and what doesn’t.
Know where to invest
Like in every other city, Pune’s residential property sector sees the most rapid impetus in pockets or locations that are still developing. It is primarily in these emerging locations that we find the most real estate activity, both its terms of development and demand from buyers. Areas like Undri, Ambegaon, Keshavnagar and Bhugaon have already established themselves as Pune’s fastest-growing new suburbs. The growth of such locations also serves the important purpose of decreasing demand and development pressure in the central regions. However, even in these areas, there is danger lurking for uninformed property investors.
In many of the emerging residential property destinations, we have seen a huge load of housing projects where construction has either been stalled or delayed far beyond the initially committed completion timelines. Investors and end- users who bought into such projects at the pre-launch phase to take advantage of attractively low rates have literally become stuck along with the projects.
Know your developer
In Pune, the difference between beneficial and hazardous housing investment lies primarily in the reputation and credibility of the developer. While credibility is a much-abused qualification that almost every developer lays claim to, it is actually quite simple to verify. One merely needs to examine the builder’s track record of successfully completed housing projects. ‘Successful completion’ does not mean ‘eventual completion’, but completion within 1-1.5 years of the delivery timelines promised to buyers.
RERA Compliance – the new Gold Standard
With the Real Estate Regulatory Act (RERA) slated to finally become a nation- wide reality by mid-2017, Pune’s residential real estate market is going to become more vibrant and lucrative for property investment than ever before. Thanks to this key reform in the real estate sector, the city is set to shed a lot of its ‘bloat’ – or burden of small-time, inexperienced builders out to make a quick buck with small, shoddily designed and executed projects which are also often of dubious legal status. Such players will simply not be able to sustain operations post-RERA, and will vanish from the market.
What will remain are builders of good repute, market standing and track record – credible players who are able to abide by the strictures that RERA lays down to protect the interests of buyers and investors. While this landmark is understandably a source of fear and trepidation for fly-by-night builders, it heralds the even more powerful emergence of strong, credible developers.