Should You Buy A Home In Pune This Festive Season?

Kishor Pate, CMD – Amit Enterprises Housing Ltd.

There are many reasons why people decide to get off the rental housing bandwagon and buy their own homes. One of the most important ones is that a self-owned home is an investment-grade asset which appreciates and safeguards one’s financial future.

Also every family has a cherished dream of having their self-owned house, which is a lifetime shelter for them as well as for the future generations.

Having a home of their own is the fondest wish of every Indian family. Among other things, the Indian festive season celebrates wealth and prosperity, and nowhere is this spirit displayed more strongly than in Maharashtra.

woman holding diya

For realizing the cherished dream of a self-owned home, all aspire to look for property during the festive season. Even from an investment perspective, buying a home in Pune makes more sense than ever before.

Property prices on Pune’s residential real estate market saw year-on-year appreciation to the tune of 7.9% last year – and though appreciation has moderated somewhat this year, the current market readings are still between 5-6%.

Price growth has been moderate in 2016 so that buyers are not discouraged from making purchase decisions, especially during the critical festive period.

However, given the positive investment scenario and increasing demand for office spaces in Pune, residential real estate demand in the city is going to pick up tremendously in the future. This increased demand is bound to exert upward pressure on housing prices.

In the last quarter of 2016, sentiment on the Pune residential property market has seen the return of outright positivity, and areas that offer better affordability and returns on investment have been receiving healthy traction.

Most of the residential project launches in the city have been in the North-West and North-East regions, with the highest demand for housing emanating from the IT/ITeS, BFSI and manufacturing workforce. Areas like Ambegaon, Kharadi, Hadapsar, Balewadi, Hinjewadi, Nagar Road and Wagholi and Nagar Road have continued to attract good demand on the basis of improved connectivity with the key business districts.

However, it is the fringe areas of South-East Pune – specifically Undri and Pisoli – which have seen the most notable pick-up in demand, leading to a significant number of launches over the past few quarters.

Relatively lower property prices and good connectivity to central areas with their reputed schools, hospitals and other important social infrastructure has led to the strong emergence of South-East Pune as a real estate contender.

All in all, given the attractive offers and pricing schemes from developers and the continued affordability of the city’s emerging areas, this festive period brings with it a strong rationale for homeownership.

For investors, the time is right to identify the hottest growth corridors and make their play before they miss the most favourable entry point and have to contend with higher prices in the future.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Pune’s Suburban Real Estate Transformation

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

One does not tend to think of Pune a Metro city, especially when compared to neighboring Mumbai. Unlike Mumbai, however, Pune has the benefit of being able to grow spatially and it has been doing so at a very rapid rate.

With the constant absorption of surrounding villages, the city will at some point overtake Mumbai in terms of developed and developing urban areas. Even today, Pune’s suburbs account for a massive geographic spread – and these suburbs are seeing the highest rate of affordable and mid-range housing development.

As of today, Pune’s suburban market includes areas like Ambegaon, Undri, Baner, Pashan, Warje, Bavdhan, Dhayari, Katraj, Mohammedwadi, Mundhwa, Manjri, Hadapsar, Daund, Kharadi, Wadgaon Sheri, Dhanori, Pirangut, Hinjewadi, Kalyani Nagar and Koregaon Park, Wagholi, Chakan, Fursungi, Saswad , Katraj, Chikhli, Kasarwadi, Kalewadi, Phugewadi, Pimple Saudagar, Pimple Nilakh, Pimple Gurav, Tathawade, Thergaon, Talawade, Sangvi, Wakad, Dapodi, Hinjewadi, Bhosari, Pimpri, Chinchwad, Dighi, Nigdi, Moshi, Charholi Budruk, Ravet and Akurdi.

Given the vast multitude of locations in Pune which can technically be classified as suburbs, we can immediately see that some of them perform better than others. Suburbs closer to the city’s IT / ITeS parks perform best, as they attract steady demand from buyers with stronger budgets.

Because of this, such locations also see better civic and social infrastructure being put into place. Other suburbs have large integrated townships being developed. Many of the extended suburbs are currently seeing only budget housing being developed; however, as these suburbs see infrastructure creation and pick up on the back of spill-over demand from saturating areas close by, they see corresponding improvements in their profiling.

Contrary to popular belief the suburbs are, in fact, where the actual real estate action lies. In a growing city like Pune, the common misconception is that the most valuable real estate locations are in the city center. Of course, housing options in and around the center of the city will always see demand thanks to the proximity to the Central Business District and Secondary Business District.

However, many of the central locations are also unaffordable and congested. Developers are usually able to acquire only very small land parcels in central areas – plots which will accommodate only a limited number of flats in the housing projects.

astonia classic_night

Since the available space on such plots is very restricted, these developers offer very limited amenities or no amenities in these projects. As a result, residents have few of the benefits which a modern urban life should provide.

At the end of the day, what one sees is minuscule strangulated residential areas that offer little or no lifestyle accoutrements while simultaneously adding to the urban issues which defines almost all inner-city living in Pune today.

As a result, Pune’s peripheral suburbs and newly emerging real estate markets are the hottest residential property destinations, drawing considerable interest from residential property investors who are attracted by the high demand in these markets as well as the fact that property valuations have sufficient potential for healthy growth.

Some of the best-performing suburbs which host well-facilitated projects by reputed developers are Ambegaon, Undri, Hadapsar, Baner, Wakad and Hinjewadi. These suburbs are more or less driven by Pune’s burgeoning IT/ITeS sector which has proved to be the single-largest booster for residential and commercial real estate in the city.

While properties in and around the IT hubs tend to be too expensive to attract the bulk of end-user and investor demand, areas that are well connected to these employment generators while at the same time offering lower property prices are very hot tickets indeed.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

The Time Is Right To Buy A Ready-Possession Flat

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

Do ready-for-possession or close-to-possession homes make more sense than properties which will be delivered only 2 to 3 years down the line? There was a time when the answer of most end-users and real estate investors would have been a resounding ‘No’.

After all, it is common knowledge that ready-possession homes or homes which would be delivered in six months or less were costing more by about 30 to 35%. In price-sensitive markets like Pune, paying such a premium merely for the benefit of earlier possession made no sense at all.

The budget constraints of end users aside, even investors would shy away from paying such higher price, since they are obviously focused on entering at the lowest possible point and exiting when the property has appreciated sufficiently.

They were certainly not open to foregoing the highest possible returns on investment for ready-possession flats, even if it meant being able to rent them out sooner. After all, the potential resale price would still take a massive beating.

The Current Scenario

Thanks to the protracted slowdown on the property market in most Indian cities, developers across the country have witnessed their inventories piling up.

Reduced sales traction has induced a major sea-change in their pricing strategies, resulting in ticket sizes coming down even in ready-to-move properties in their projects. This has proved necessary because selling existing inventory is the only way they can build capital to fund future projects.

In fact, there has never been a time in the history of the Indian real estate market when properties which are ready or close to possession were so cost-effective. The property market has stabilized.

Quality properties by reputed developers in very good locations are now available at prices which were previously possible only if buyers were willing to wait for two years or longer.

Sound Rationale For Both Options

The option of opting for quick possession or under-construction projects is debatable. In the current scenario, it is for the individual to decide on the budget and on the urgency of buying a house. Individuals with long-term requirements who also need relief in the payment of installments should definitely opt for under-construction projects.

Today, most builders have come up with the scheme of pre-payment of EMI, which helps in reducing the interest burden and monthly EMIs. While opting for this route, the builder should be selected wisely to ensure the safety of one’s investment – only builders with a good reputation and financial background should be considered.

However, buyers in need of a home for immediate possession who have the requisite funds arranged for and are keen to dich their landlord for good have never been in a better place than today.

Colori Phase 2 Undri

As things stand today, buyers who are eyeing popular growth corridors like Pune’s Undri can actually buy a 2 BHK flat from a reputed builder which will be delivered within six months or less, at all-inclusive prices which they can very much afford. Simultaneously, there are projects offering the under-construction opportunity.

It should be noted that real estate markets across India are beginning to revive, and prices in Pune – a city which held on to its strength as a preferred investment hotbed – will start increasing significantly within the next 6 to 8 months.

Advice To Buyers

In the existing market environment, it is easy to be confused by the various seemingly attractive offers that most developers are doling out. In fact, quite a few players have officially announced astounding rate cuts on their projects in the hope of generating faster sales.

Buyers should be aware that such offers are almost always tied to projects which are in the earliest stages of development, and often have hidden costs or features which are not in the best interest of buyers.

Buyers must therefore assess the builder by his previous track record and study the projects he has completed so far. The cost should not be only aspect which should be weighed for taking decision while buying a property.

In fact, the price aspect should be the last one to consider – once committed to a builder or project, the buyer is tied to his or her choice.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.