Housing Trends – Is now a good time to buy?

Housing trend - propzapper blog

Housing Trends: Are home sales up or down? Is now a good time to buy?

Pune has emerged as a winner in the league of cities that are developing in every aspect. Not only this, Pune has also come up as one of the country’s top 5 destinations for real estate investment. The city has seen promising growth in the fields of Information Technology, automobile, manufacturing, education, infrastructure and real estate sector. As a result, the housing trends in Pune has seen a tremendous upward movement over the years.

The current scenario of Pune Real Estate Market

Pune real estate market is said to have stepped on a slowdown journey. According to the Residential Pune Realty Report for December 2015 – June 2016, the prices of apartments have dropped variably within the last six months for the first time taking in consideration the 5 years window.

The report states that the new project launches in Pune are down and are being launched at lower prices than existing projects in the same areas. Prices on an overall market basis are going down and there has been a resizing of apartments to cater to the demand for smaller homes and ensure regular supply of homes in an affordable price range.

According to the report, out of 323,372 homes are currently under development, a total of 230,547 homes are in the early- or mid-stage of construction.

If the half yearly sales volume of year 2015 and 2016 are compared, the sales volume is said to be steady with a little rise this year.

real-estate-pune-knight-frank-data

Graph sourced from Knight Frank

 Highlights of the Residential Pune housing trends – Realty Report:

  • Prices have reduced by -2.20% during January 2016 – June 2016 period, thus continuing the slowdown in prices from the last two years.
  • New project launches (including new phases of existing projects) have slowed down to 890 in the first half of 2016.
  • From an inventory perspective, the overall market has grown by 6.06% in the last 6 months
  • Inventory of 3,23,372 homes currently under development in various stages.
  • While there’s a slowdown, sales volume have increased significantly and are up by 6.38% in the last six months on an overall basis
  • The segments that are expected to move quickest are the budget and value segment which have an inventory overhang of 11.96 months and 13.46 months respectively.

The first signs of the downfall can be noticed with the fact that the apartments are being resized and being offered at a feasible price to fight with the price surge here.

Though stats and reports suggest that Pune has a shortfall of demand as compared to its supply, but nonetheless it is still attracting the buyers and investors.

real-estate-pune-99-acres-dataGraph sourced from 99acres

Key Growth Drivers

There are plenty of reasons which are making Pune grow in all fields. Some of which are:

  • The Growing IT Sector: It is giving opportunity to lakhs of people. There are huge IT parks situated all over Pune where the employee count is increasing at a constant rate. More people being employed here create more demand for housing. This real estate sector is growing and is sure to grow at a persistent rate for this city.
  • The Relaxed Lifestyle: Pune is projected as the retirement capital, where people consider it safe and relaxed to spend their life after retirement. Low pollution level, less population, good quality of living and the wonderful weather round the year attracts people to stay here and think of investing in real estate here.
  • Cost of living: As compared to other metropolitan cities and smart cities of India, the cost of living in Pune is cheaper. The average cost for buying basic necessities, living on rent here, shopping, dining out etc. is certainly less than any other metro city of this country.
  • Education: Pune is one of the most sought after destinations for education. With so many colleges and institutes, students from all over the country and globe are coming to this city. Looking at the career options after education, most people do not want to leave Pune city owing to its lifestyle and cost of living.

The distance between Pune and Mumbai has considerably reduced owing to the smooth Mumbai-Pune Expressway. A lot of people from Mumbai are seeking Pune properties for second home investment and weekend homes hence boosting the sale of homes in Pune and suburbs.

Pune manages to maintain its sales in the ‘Sweet Spot’ Budget Range

Though Pune’s housing trends continues to experience growth in capital value appreciation but the rate of appreciation has declined from the past years. Only a few areas in the city witnessed growth in appreciation.

According to the study, most people looking for budget homes prefer to buy homes that fall under the slab of Rs 4200-5500 per sq. ft, in whichever areas they are searching for. Also most buyers prefer to book houses in the pre-launch phase to crack a deal at a lower price.

Demonetization effect on Housing Trends – The Real Effect

demonetization-propzapper-blogAfter the decision of demonetization of 500 and 1000 notes, there are so many articulations regarding the real estate market. That means millions of black money will now become useless as it cannot be deposited in to the bank accounts.  The primary and secondary market of real estate will have few and genuine buyers who will transact through bank and other financial institutions.

If seen in the long term, the effect of demonetization will increase transparency in transactions in the real estate market. The buyers are now prohibited to use the cash in black and opt for transactions through bank thereby the real estate players will be forced to lower down the prices to meet their supply. Low demand will lead to lower prices in the near future. Also with so many people depositing their cash into their bank accounts it will increase the deposit base of the banks. This also implies that banks can lend money at lower interest rates.

Investors looking to buy property with black money are now pulling off from the market. Real estate looks one of the hardest hit sector but moving towards increased transparency with demonetization. The prospective buyers should wait for some time to see the property rates and interest rates coming down in an affordable price range.

Check for best Property deals : Click Here.

Watch out for our next blog post on Real Effects of Demonetization on Real Estate next week.

Stay Tuned.

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4 thoughts on “Housing Trends – Is now a good time to buy?

  1. Home sales are down because of Demonetization and hence now is the good time to by home. looking for ready possession flats pune visit This is a nice site!

  2. Pingback:Demonetization – Is it a good time for Real Estate? - PropZapper Blog

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