Pune is a preferred city for investors due to its pleasant climate, affordable real estate prices and good infrastructure. The pandemic created a huge disruption in the realty market, just like other metros in the country. However, with the discovery of a vaccine for COVID-19, the real estate has started picking up and it’s the right time to invest in the city of erstwhile Peshwas, says Real Estate Astrologer and Housing Strategist Hirav Shah
Pune is the second largest city in Maharashtra after Mumbai and the eighth most populous city in the country. It is called the Oxford of the East owning to the flourishing of various fields such as literature, art, theatre, science, etc, and as a hub of learning during its long history. It is also referred to as Queen of Deccan owing to its historical, political, social, cultural and political importance and picturesque locales in Deccan.
Today, Pune is a throbbing cosmopolitan city which is home to IT hubs. It is considered to be one of the best cities to live in by many techies owning to its pleasant climate and thriving social life. So, it is little wonder that real estate in the once city of Peshwas has continued to attract buyers, despite the pandemic. But the situation was not all rosy when Corona hit the city. Just after the pandemic broke out, the realty dipped drastically during the initial months, as was the case in various cities across the country. However, it is noteworthy that the realty picked up during the second half owing to a variety of reasons and this is likely to impact the market during 2021.
There are a few reasons for this positive upturn such as the possibility of increased connectivity through the city, thanks to the metro lines being planned; development of real estate around IT hubs; reduction of stamp duty by the Maharashtra government; buoyant middle class market; stability in luxury ticket properties, among others. The residential sales in the city decreased by around 40 per cent in H1 2020, while launches during the same period got reduced by 37 per cent. Like other metro cities in India, April-June saw minimal sales as the buyers were averse to risk-taking and deferred financial decisions.
Real estate future in Pune
As the lockdown was phased out, Pune has seen modest increase in housing launches and sales volume. So, let’s check out what causes impacted real estate trends in Pune.
Value addition for home buyers
Pune is an excellent option for those looking to invest in affordable property vis-a-vis Mumbai and this makes it attractive for those looking to put in their money. This makes it an attractive market for investors thanks to negotiable prices, low interest rates and affordable rates. Also, the measures implemented by the state and central government are working in favour of the buyers.
Another key element is the hike of acceptable differential between the agreement value (what we declare on the sale agreement and sale deed) and circle rate from 10 per cent to 20 per cent till June 2021. Also, NRIs are more interested in picking property in Pune due to lower ticket zones (at least for now), lesser traffic and nice weather.
Reduction in stamp duty
Owing to the pandemic and to give a boost to the huge plunge in real estate sector, the Maharashtra government decided to temporarily reduce stamp duty rates from 5 per cent to 3 per cent till March 31, 2021. So, for a buyer, it will translate to 4 per cent, as one has to pay 1 per cent local body tax along with 3 per cent stamp duty. This move is bound to attract buyers as it will mean considerable savings for them. The first quarter of 2021 will also see increased sales by those wanting to save long-term capital gains tax or LTCG tax, by buying another property under Section 54 of Income Tax Act, 1961.
Proposed metro connectivity in 2021
Pune will have two operational metro corridors by 2021 implemented by Maharashtra Metro Rail Corporation Limited (MahaMetro). Purple Line will run along PCMC Bhavan (Pimpri) and Swargate via Kasarwadi, Khadki and Range Hills, among 12 other localities, while the Aqua Line will operate between Vanaz and Ramwadi via Anand Nagar, Pune Railway Station, Yerwada, and 11 different areas. A third metro line, which is expected to begin operations by 2023, will be running between Civil Court Pune and the key IT/ITes hub in the City: Hinjewadi. It will consist of 23 stations.
Tech-savvy realtors and attractive offers
Technology is playing an important role ever since the industry adapted it during pandemic times. Virtual home tours, video conferencing with hopeful clients, targeted digital campaigns and webinars have now become a part of the overall game and realtors of Pune confide that they are here to stay.
This apart, another key reason are the irresistible offers in the form of minimal expression of interest, cash discounts and freebies from realtors. As of now, Pune is a buyers’ market and the sales are expected to increase during the festive season between October and December.
Goes without saying, the pandemic has also adversely affected the commercial real estate sector in Pune. And this in turn impacted the home buyers’ market as the economic slowdown put a halt on expansion and hiring plans of many companies. However, with industries slowly getting back on track slowly and steadily and with the hope of a solution to the pandemic in the form of vaccines, economic activity is expected to improve gradually in the second and third quarter of 2021.
As for marking out specific locations, Kharadi, Baner and Hinjewadi are areas which will have an abundance of residential property on sale as all three localities are backed by their sprawling IT and ITes hubs.
To conclude, the above mentioned reasons will have an impact on property trends in Pune and property price trends in the city. However, much depends on the economic situation in third and fourth quarter of 2021 and the on-going tax reduction schemes.
Real estate price trends in Pune
Increase in demand for mid-income housing projects
The pandemic could have set in a disruption, still, Pune has seen a rise in demand for mid-income housing projects which increased by 5 per cent in April-June 2020. Localities like Hinjewadi, Wakad, Balewadi, Hadapsar, Phursungi were the main benefactors in increased popularity for residential properties, new inventory supply, owing to their proximity to IT/ ITes infrastructure and a host of facilities within a radius of 5-6 kms. Properties costing between Rs 60 lakh and Rs 1.5 crore were in demand as buyers are hoping to take advantage of the market and invest in larger properties in high ticket sizes.
Emergence of Aundh as a commercial and residential hub
Aundh has overtaken locations such as Baner and Wakad with increase in both residential and commercial properties. From luxury and mid-range apartments up for sale alongside rental properties, it is emerging as a hot-spot in Pune city. Also, there has been rapid acquisition of commercial spaces by leading IT companies.
Aundh is about five minutes away from Mumbai-Pune Expressway and IT hubs of Banners, Wakad and Hinjewadi. Line 3 of Metro expected to be complete by 2023 will provide seamless connectivity with the rest of the city. It also has two Pune Mahanagar Parivahan Mahamandal Ltd (PMPML) bus stops at ITI Aundh and Aundh Gaon.
The locality has residential units ranging between Rs 1.5 to 4 crore for centrally air-conditioned 3-4 BHK units which come with landscaped gardens, gyms, modular kitchens and rooftop swimming pools. The rental asks range between Rs 28000 and Rs 45000. There are also mid-range neighbourhoods with housing units ranging between Rs 50 lakh and Rs 85 lakh. The rental asks here range between Rs 13000 and Rs 18000.
And last but not the least, Aundh is also on the popularity map due to its interesting social scene. It has exclusive dining options, good schooling options and culture centres such as Bharat Ratna Pandit Bhimsen Joshi Kalamandir and Sayajiraje Gaikwad Bhavan which are meeting points for those interested in theatre and music.
To sum it all up, Pune is surely a city to lookout for, for investing a chunk of that hard-earned money in residential and commercial spaces in 2021.