Pune’s real estate market has experienced a significant increase in residential rates over the past year, according to the latest report released by Gera Developments. The report, titled ‘The Gera Pune Residential Realty Report’ for June 2023, provides valuable insights into the residential real estate market within a 30 km radius of Pune’s city center. Covering 151 micromarkets, the report highlights key findings and trends in the Pune housing market.
The report reveals that property prices in Pune have risen by 11% across all projects over the past 12 months. This increase is seen in new projects, existing phases of older projects, as well as new phases of ongoing projects. The average rate per square foot has risen from ₹5,208 in June 2022 to ₹5,782 in June 2023, indicating a strong demand in the market. However, despite the price increase, the overall sales volume has decreased by 8% in the past year, which can be attributed to rising home prices and increased interest rates.
One notable trend highlighted in the report is the decrease in the number of new project launches. Over the past year, only 93,734 new homes were added to the total inventory, marking a 19.19% decrease compared to the previous year. This decline in new launches suggests a 10-year low in terms of the number of projects and overall inventory. The report also indicates an increase in the average size of projects, with larger developers dominating the market. This shift in the market dynamics may lead to two possible scenarios: an oversupply situation if developers introduce substantial supply or a steady rise in prices if the current equilibrium levels maintain constrained supply.
The report further analyzes different segments of the market. The premium segment (prices between ₹5,833 per sq. ft. and ₹6,998 per sq. ft.) and the premium plus segment (prices between ₹6,999 per sq. ft. and ₹8,748 per sq. ft.) experienced the steepest decrease in new launches, while the luxury segment (prices above ₹8,748 per sq. ft.) witnessed the lowest drop of 8%. Although the number of new launches decreased compared to the previous year, the current figure of 93,734 units is still higher than previous years, indicating a recovery from the impact of the pandemic.
Despite the decrease in new launches, the report does not indicate any significant concerns in key operational metrics such as the replacement ratio and inventory overhang. The total inventory available for sale has reduced by 7% compared to the previous year, reaching 69,553 units in June 2023. This reasonable level of unsold inventory accounts for 23.36% of the total homes under development, a significant improvement from the peak unsold inventory observed in June 2016.
The sales volume has also seen a decline of 8% over the past 12 months, with the sub 1,000 sq. ft. segment being the main contributor to this decrease. However, pockets of growth were observed in the 1,001 sq. ft. to 1,800 sq. ft. segment, as well as in the budget and value segments, which experienced growth rates of 2% and 5%, respectively. On the other hand, the premium, premium plus, and luxury segments witnessed declines of 37%, 14%, and 13%, respectively. The market is increasingly moving towards larger projects, with the number of projects with more than 500 units rising from 115 in June 2018 to 174 in June 2023.
In conclusion, the Pune residential real estate market has experienced an 11.03% increase in residential rates over the past 12 months. While there has been a decrease in new project launches, the market remains balanced, and key operational metrics indicate a reasonable level of unsold inventory. The trend towards larger projects and the recovery from the pandemic’s impact are notable factors shaping the current state of the market.
