Pune’s Residential Sales Stable; Mumbai Close to 1H16 Sales Numbers
Pune’s residential market seems to have seen very little impact of demonetization if the 1H17 sales figures are anything to go by. Although the city’s apartment sales had remained steady even in 2H16 when demonetization had affected most other markets, Pune’s sales showed a slight improvement as they rose by 4% (y-o-y) in 1H17. With this development, Pune’s residential market has become India’s most dependable and established one.
Affordable and mid-segment housing (in the price range of INR 3,500-6,000/sq.ft.) added more than 25,000 units of supply to the Pune residential real estate market in 2H16-1H17. The fringe areas of Pirangut, Bhugaon, Wagholi, Dhanori, Hinjewadi and areas in close proximity to Hinjewadi saw the maximum demand on the back of lower ticket sizes, coupled with good connectivity to the city’s primary IT hub. This trend will continue, with several more affordable and mid-segment projects likely to hit the market in these areas over the next 12-18 months.
Areas such as Dhanori, Wakad, Ravet, Undri-Pisoli, Hinjewadi, and Wagholi are now witnessing significantly increased sales enquiries, and will remain among the preferred destinations for middle-class home buyers in coming years. Housing in the price range of INR 20-35 lakh is now witnessing increased interest from private developers, and turning out to be a key driver for housing sales in Pune.
Focus shifts to increased ‘affordability’ in Mumbai
Mumbai’s sales figure too came close to 1H16’s number thanks to a lot of traction in the ‘compact homes’ category. The financial capital saw sales momentum pick up further in the ensuing quarters, thanks mainly to the increase in buyer confidence after the rollout of RERA in Maharashtra. The festive season is expected to drive sales further in 2H17 as fence sitters are encouraged by a sanitized market environment and simultaneously being enticed by several offers and discounts across locations.
The latent demand in the relatively lower capital value ranges offered in some of Mumbai’s suburban locations is being met by the launch of ‘compact home’ projects in recent months. This supply specifically targets the needs of professionals, singles and unmarried couples as well as upwardly-mobile nuclear families. Developers are realising that this is the new ‘sweet spot’ of a significant cross-section of Mumbai’s population, and that it makes good business sense to cater to it. The emergence of ‘compact homes’ as a new product category thanks to these factors helped push up the overall sales figure for the city.