What Drives Demand For Properties In Undri

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The city of Pune is constantly expanding, causing demand for homes in new areas and thereby boosting the faster development of these locations. Undri is not a new entrant on the Pune real estate landscape, but it is now gaining increasing prominence because of the massive rise in demand for affordable housing in this precinct.

The majority of property buyers are looking for homes that cater to their families’ needs while at the same time remaining affordable. With the NIBM area having yielded maximum demand that has resulted in a host of projects that are priced above baseline affordability,

Undri has now emerged as one of the most viable residential property destination in Pune. While for many years it lacked the kind of infrastructure that garners interest from the buyer and investor community, this is now changing rapidly. The demand from the city’s manufacturing and IT sectors has encouraged more and more developers to concentrate on this vibrant and promising area.

Importantly, areas like Undri are ideal for offering residential options to the budget homes buyer segments and at the same play a significant role in relieving the pressure of urbanization on the city. In fact, Undri now has many options both in the affordable and premium property categories, which is giving new prominence to the area.

In terms of location, Undri has very definite USPs. It is enticingly close to Pune Camp and has the additional advantage of being well connected to various key localities in Pune via local and interstate highways.

At the same time, it retains its serenity and dense green cover protected by Government regulations, which has turned into a major draw for property buyers who are tired of the concrete jungle life with its pollution and traffic congestion.

Amit's Astonia Royale in Undri
Amit’s Astonia Royale in Undri

Proximity to Wanowrie and NIBM ensures that residents in Undri have access to all necessities of daily living such as shopping, healthcare, entertainment and ample public transport. It is an ideal residential real estate location, and one of the few in the more central part of Pune which still offer the city’s laid-back natural charm at affordable rates.

Undri also benefits from its proximity to the IT and ITeS hubs of Magarpatta and SP Infocity and also the thriving high street shopping area of MG Road. As a result, Undri is increasingly patronized by employees from the close-by IT/ITeS companies. With the widening of the Katraj-Kondhwa-Phursungi-Solapur highway, Undri is going to be even more connected and accessible.

The fact that all parts of this location will soon be included within the Pune Municipal Limits is attracting significant interest from property investors who are banking on incremental value growth on the heels of even more infrastructure development in this area.

How The Upcoming Budget Can Help Real Estate

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The forthcoming budget announcement by the financial ministry of the new government is a critical one. It will be the first step on the ‘walk’ that must follow the electoral ‘talk’ of economic recovery and ushering in new, growth-oriented policies for the country.

At this stage, every industry in the country – from textiles to agriculture, from aviation and tourism, from manufacturing to banking and allied financial services, from pharmaceuticals to information technology, from telecommunications to healthcare and from retail to real estate, depends on major fiscal reforms.

It is not only India’s continued viability in the global sweepstakes that is at stake now. The very welfare of its people and a revival of their trust in their country are on the ‘critical’ list.

Over the past few years, the confidence that Indians have in the power of a ruling government to revive its flagging fortunes has been seriously eroded. Bureaucratic muddle, corruption and policy paralysis have become accepted norms. The arrival of a new and very proactive government at the centre is the first sign of real hope for positive change.

Boost Industrial Expansion And Output

A country’s economic health rides on how well its primary industries perform. It depends on how encouraged these industries are to expand, how many jobs they create in the bargain, to what degree foreign funds are attracted and encouraged to invest in various industries, and how much consumption increases because of all these factors. The consumption sentiment is one of the most critical, because it dictates how well various sectors will perform.

Real estate is just one of many major industries in India. A government focused on the country’s overall economic revival must consider the needs of all its industries. This holds true even if real estate is an industry that, unlike other industries such as electronics and luxury apparel, addresses very visible deficits.

Residential real estate addresses the deficit for housing in India, while consumption of commercial real estate is directly related to how many jobs will be created in a certain city.

Increase Financial Confidence And Boost Consumption

Given that overall consumption sentiment is key, the new government will primarily need to present a budget that increases Indians’ financial confidence. To achieve this, it will have to introduce a more benevolent taxation regime.

Specific to boosting the real estate sector, the government must formulate and present a policy which provides clear and attractive tax benefits to developers who are focused on affordable housing. At the same time, raising the income tax exemption limit for home loans from the current Rs 1.5 lakh to at least Rs 5 lakh would encourage Indians to buy more homes.

india rupee sign

Such measures are very much within the purview of the upcoming budget, which must also ensure that it provides incentives to boost entrepreneurial spirit and generally help Indians to earn more, save more and invest more.

It is axiomatic that the real estate industry, as well as various other industries, will see significant revival merely on the basis of such a rebooted climate of confidence.

Provide Infrastructure Status For Housing

Real estate faces several hurdles other than flagging consumption sentiment that have harmed it immensely over the past few years of sectorial slow-down. Clearing all these hurdles in a single revamp of existing policies would be extremely challenging, if not impossible.

However, one game-changing measure that new government can certainly undertake in the immediate future is to grant infrastructure status to the housing sector.

In the past, such a provision has proved to be a major turning point for the real estate sectors of many other countries, enabling them to significantly narrow their housing deficits. While such a measure would not fall within the ambit of budget announcement, it can and should be addressed in the ensuing parliamentary monsoon session.

So far, India has only provided infrastructure status to industries and companies involved in the development of ports, airports, highways, public transportation networks, etc.

By granting the housing sector infrastructure status as well, the new government will ensure that housing developers become eligible for critical incentives and subsidies at the Central and State levels.

It will also mean that institutional lending to the housing sector becomes more liberalized – banks will increase lending to housing developers, who will also be able to raise bonds to help generate funding for housing projects.

The Hidden Benefits Of Budget Homes In Pune

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd

Much has been said about the imbalanced residential supply in Pune. Premium or luxury housing projects seem to be given more importance by developers than budget homes or affordable housing, where the greatest need lies.

Pune is a growing city, and there is a considerable annual influx of new manpower from other cities. This is perennially pushing up the demand for lower-cost housing by people who are just beginning their careers or are in lower-paid jobs but still aspire towards home ownership.

This imbalance actually exists more in media hype than in fact. Pune does, in fact, have various pockets where developers are actively supplying such homes. Nor are these locations remote or lacking in the infrastructural attributes that make a residential catchment work well.

In areas such as Undri, Ambegaon, Pirangut, Katraj and Lonikalbhor, there are various developers with different project typologies in the fray.

Buying a flat within a limited budget is still very much a possibility in these locations. Interestingly, they are increasingly being patronized by not only lower-to-mid income home seekers but also by young, well-paid buyers who could have afforded larger and more centrally located homes. There are valid reasons behind this trend.

Because Pune is a relatively small city, commuting to and from work is not as serious a challenge as it is in cities like Mumbai, Bangalore and Delhi. In locations such as Undri and Ambegaon, road connectivity is excellent and very much supportive of daily commutes.

At the same time, all conveniences of daily life are also readily accessible. More and more young, aspiring professionals are shunning the lure of ‘snob appeal’ addresses and buying homes these areas instead on the basis of simple financial arithmetic.

budgetBy opting for homes which currently lack ‘pin code value’ but are nevertheless spacious, offer all the required facilities and are also well connected to other parts of the city, these buyers are in fact opening up their horizons.

Less money spent on a home means that more money can be saved, invested or spent on other lifestyle factors such as home comforts, cars, travel and better education for their children.

Meanwhile, the investment made into the home itself grows rapidly, since these areas appreciate faster and faster as more and more demand is pushed towards them. Budget homes in Pune also are the fastest-selling products on the resale homes market.

This is an importance sea change in the financial calculations that go into the purchase of a home. Less than ten years ago, up-and-coming professionals – primarily from the IT industry – tended to buy highly expensive homes took a serious bite out of their monthly incomes.

Later, when the IT industry took a hit, they were unable to service their home loans and were forced to relinquish these properties. Even before this happened, the EMIs on these homes constrained their ability to pursue other aspirations.

Today, young professionals in Pune are taking a more conscious call on their actual requirements and opting for homes that allow them the financial freedom to live more fulfilling lives.

As an added incentive, homes in locations like Ambegaon and Undri also provide them and their families with less polluted, greener are more visually appealing lifestyle backdrops than more centrally located homes ever could.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

A New Era Of Infrastructure-Driven Real Estate

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd

With the BJP now elected into power, there are high expectations for the Indian infrastructure industry to take off in all earnestness. This is a very important development for real estate, since the sector cannot grow without the implementation of modern infrastructure projects.

The state of infrastructure of a country is a direct indicator of how well its urban systems work. Also, all activity that is related to industries, business, professions or indeed any activity that contributes to the sustenance of cities and individuals depends on how well the infrastructure system works. However, the problem that India has so far been facing on the infrastructure front is far more complex than it seems at first glance.

Urban infrastructure is obviously not a singular concept. It includes various services and facilities like roads, water and electricity supply, waste disposal, healthcare and education services, communications, etc. But in a country like India, housing must also be seen as an integral part of the infrastructure.

All infrastructure is basically geared towards making a city more inhabitable and economically viable. But without sufficient housing to accommodate the very people that infrastructure is meant to serve, the entire concept becomes hollow and meaningless.

This is the reason why the Indian real estate industry has for so long been campaigning for being declared as an industry rather than a mere business vertical. It is also the reason why housing in India needs to be given infrastructure status.

The Indian real estate industry is depending heavily on the new government to make these extremely important changes and allow the sector to grow on the back of the corresponding incentives to developers and buyers.

infrastructure highway construction

It is also important that the numerous infrastructure projects that have been pending because of mercenary bureaucratic tangles be either launched or completed in the shortest possible time. There has never been a lack of funding for these projects.

At various points in time, bilateral and multilateral agencies such as the KFW, the Asian Development Bank, the World Bank and the International Monetary Fund have offered to back infrastructure projects in India.

However, what has been missing is effective deployment of such funds. This calls a firm consensus at the political and policy-making levels, which have been notably absent from the picture so far. Also, the proof of effective policy reforms lies in their implementation, not in their drafting.

Therefore, the challenge for the new government lies in bringing about a width and depth in infrastructure-related policies, markets and economic milieu that allow the optimal utilization of available funds at the State level.

Since its mandate on these issues is non-ambiguous and decisive, we have every reason to believe that the new government will address the problems related to infrastructure in the country, and that we will be seeing encouraging developments on this front in the future.

Image courtesy of franky242 / FreeDigitalPhotos.net