Track2Realty Exclusive: The Pune realty market in many ways is very different from many other cities in the country. Pune has showed tremendous resilience and a quick bounce back in the aftermath of the 2008 global crisis. In many ways, Pune depicts the behaviour of an extremely mature market leading to low levels of volatility in terms of capital values of the homes.
On the demand side, we see demand from a variety of sectors–IT, manufacturing/industrial, services all generate significant employment in and around Pune and as such, these multiple sectors all contribute to the employees who need housing.
When faced with weak global cues, the economy has looked to internal consumption. This is reflected in the various companies in Pune–those such as the IT companies who focus on the international market were affected, however, the manufacturing companies have made up for the lack of demand caused due to the IT companies. The multiple drivers of demand therefore bode extremely well for the Pune realty market.
The demand gets translated to supply through the real estate developers. Here too, one sees some significant traits that contribute to the buoyant nature of Pune’s realty market. Developers in Pune have realized the sensitivity around affordability of the customer. Historically, Pune has been a cost conscious market across all sectors.
And from that perspective, the real estate customer is no different. As a result of this, developers have produced homes that fit close to the customer’s affordability and need in terms of size of homes too. As an example, if one is to look at 2 bedroom or 3 bedroom apartments, it is not unusual to find 2 bedroom apartments of sizes of 1300-1400 square feet and 3 bedroom apartments of 2200-2400 square feet. In Pune, this would be the exception.
The other interesting feature is the rate of increase in the prices. By and large, developers raise property prices in a steady gradual manner. This helps in maintaining the sales volumes but also importantly, when prices see a correction during down turns, the severity of the same is blunted since the prices did not rise sharply in the first place.
…..to be continued
