By: Ravi Sinha
Track2Realty Exclusive: A stable property market otherwise, Pune like any other city has also been witness to the slow sales in the last few years. The overall macro-economic slowdown had taken its on the psyche of the home buyers who were sceptical about the fortunes of the city property market. Even the buyers who had no affordability issue were also not unaffected by the bearish sentiments.
The expectations of correction, if not crash, proved to be another spirit dampener. However, on the eve of the festive season this time it seems the fortunes of the Pune property market have suddenly changed with the home buyers back on the house hunt yet again.
The sentiment driven real estate purchase is already visible with the enquiry level on the rise with various developers across the city. In terms of the buyers’ sentiment index Pune scores way ahead of many other cities now. It is hence believed within the built environment of Pune real estate that the festive season would be the real turnaround time for the property market and the transaction would be much higher than the last few years when the macro-economic outlook was bearish and the overall sentiments played the dampener for the property market in general and the housing market in particular.
What is giving a comfort to the city-based developers is the fact that the turnaround of the sentiments has been pretty swift. As a matter of fact, the macro-economic outlook has changed for the better in just one previous quarter and what it has actually done is that it has changed the buyers’ psyche vis-à-vis their investment in general and property market in particular. It is hence no surprise to the market watchers that the buyers are anticipating triple comfort – job security, low interest and inflation in control – that could make their home purchase easier.
The home buyers have been watching the property market on the sidelines for long and have now understood the fundamentals quite well. Hence, they feel that the time has come to invest as the market is evenly balanced for both the developers as well as the buyers now. It may not be the same in time to come once the actual positive change in the economic outlook is on ground with statistics. Post the festive season the market may turn out to be a buyers’ market yet again; something which at the moment can be conveniently termed as equal opportunity market.
Uma Ganpathi, An IT professional in Pune has zeroed in on a property in Baner. He maintains that festive spirit is no doubt on the back of his mind, yet on a rational level too he feels this is probably the best time in the last 3-4 years and the market is poised to see property prices appreciate in the next two to three quarters when the growth of GDP figure will be released. As of now, the developers are resisting the price rise due to festive spirit when they wish to dispose the inventory.
“It has been more a case of mind over matter and the negative sentiments than affordability kept the home buyers away from the market. As far as demand and supply cycle of Pune property market is concerned, the prevailing prices and growing city indicate the market is still under-supplied and hence price appreciation is a logical conclusion. During the festivals there may be some of the best deals available in the market but the price point can not be the same for long. Actually what forced the developers to hold the prices for long is the bearish buyers’ sentiments and that definitely is changing now,” says Ganpathi.
Ganpathi is not alone in Pune who believes that the market is best positioned for the average home buyers. Across the professional domain there is a feeling of job security now with the recovery in Indian economy, interest rates are expected to only go downwards and the RBI has already indicated that inflation is on course of downward movement. Hence, the home buyers believe that if they miss the home purchase now they may end up paying more for the same property next year.
Analysts seem to agree with this expected and anticipated triple comfort of the home buyers in job security, low interest and low inflation ahead. Abhay Kumar, CMD of Grih Pravesh Buildteck agrees that the property market of Pune has indeed bottomed out and some of the right properties in the right location at the right price point are poised to be sold during the festivals. According to him, the festive season ahead is expected to be the game changer of city property market.
“I feel the buyers are already out in the market even during the shradh ahead of Navratra, which actually is the lowest point of property transactions. This indicates the way forward and the upcoming festivals should indeed be the turnaround of the market. Added to the market dynamics of the economy, some attractive marketing strategy in the form of freebies and discounts is expected to attract the buyers who have played the waiting game for long,” says Abhay.
Everyone within the built environment of Pune real estate maintains that the home buyers have played the wait and watch game for long. But the residential property sales over the year have been slowly gaining momentum now. With this gain in momentum the prices are expected to bounce strongly in the year ahead. Developers agree that the market is improving; there has been an increase in enquiry levels and footfalls in various projects. The change in sentiments is visible among the buyers across the segment of property. For instance, even the demand for luxury property has also gone up as the developers are innovating with the offers for the customers. A handful of palatial amenities under one roof seem to be the new selling mantra of luxury projects.
The developers definitely have reasons to feel elated as the buyers are back in the market. Added to it, the new government also promises to ease regulation processes, speeding construction processes and put an end to hurdles in clearances and green stick over the projects. Collectively, it is a celebration time in the city property market for both the buyers as well as the real estate companies. The upcoming State Elections also promise to be good for the fortunes of the realty market.
This raises a fundamental question as to whether it is sheer sentiments or the ground realities too indicate this is right time to enter Pune property market. Analysts point out that ground realities are heavily loaded in favour of market recovery and now with the change of sentiments an overall eco system of Pune property market has changed.
Hence, the home buyers in Pune are enquiring about the properties which they plan to book during the auspicious festive days. The developers are also determined to make the best of the festive spirit and many developers are attracting their customers with many value added services. A few new launches are on the cards and some attractive freebies too will be soon rolled out. The buyers never had as much luxury of choices in the city property market and that is what is driving them to home purchase.
