INSITE PUNE RESIDENTIAL MARKET UPDATE JANUARY - MARCH 2021 Market Sentiment WHAT’S INSIDE? • InFocus: Union Budget 2021-22 • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted Pune’s realty market in Jan-Mar 2021 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets FROM CBO’S DESK The first quarter of 2021 witnessed a resurgence in sales volume across On the supply front, over 600 residential projects were launched in metro cities, particularly in Pune and Mumbai, amid a stamp duty cut metro cities, adding approximately 75,000 new units to the market. until March. While continued adoption of work-from-home weighed down Mumbai contributed close to 40 percent of the total new supply, rental demand and ‘asks’, it pushed the desire to own a home further up. followed by Hyderabad at 20 percent and Pune at 15 percent. Owner This subsequently brought back interested homebuyers to the market, listings posted on 99acres also went up by 20 percent in Jan-Mar 2021 who leveraged on deals and discounts rolled out by developers and against Oct-Dec 2020. home loan interest rates slashed by lending institutions. In line with the recovering market sentiment, site visits and sales, pricing power returned The green shoots of recovery seen so far will have to stand the test of to the sellers. Based on properties listed on 99acres, none of the eight time with a steep surge in COVID-19 cases and the resultant restrictions metro cities recorded a downward revision in average listing prices of in some cities may impact economic recovery, project construction Maneesh Upadhyaya residential apartments in Jan-Mar 2021 against the previous quarter. timelines and buyer site visits. Fingers crossed as we enter the new Chief Business Officer Buyer responses also reported a seven percent surge in the same period financial year. 99acres.com on 99acres. INFOCUS: UNION BUDGET 2021-22 NATIONAL OUTLOOK FOR THE HOMEBUYERS FOR THE INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES Giving a fillip to affordable The Government showed its inclination The home buying sentiment remained Property prices remained unchanged homebuyers, Union Finance Minister towards boosting affordable housing upbeat in Q1 2021, despite a fresh wave in Delhi NCR, Mumbai, Bangalore and Nirmala Sitharaman extended the time supply by proposing an extension in time of COVID-19 cases across metro cities. Pune, but inched up slightly in cities limit to avail additional tax benefits of line for developers to avail a tax holiday While site visits reduced in March 2021, like Hyderabad, Chennai, Kolkata and Rs 1.5 lakh under Section 80 (EEA) of for another year till March 31, 2022. The housing sales grew gradually. Mumbai Ahmedabad. Unsold inventory of about the Income Tax Act. The Government Union Finance Minister also granted and Pune led all metro cities in terms of 4.6 lakh units maintained a downward also announced steps towards additional tax exemptions for affordable property sales as homebuyers rushed pressure on property prices, despite a improving the civic and transport rental housing projects, which are aimed to cash in on the reduced stamp duty surge in construction costs, thus forcing infrastructure in the country. For at providing rental housing for migrant rates, a benefit valid until March 31. developers to limit profit margins. instance, under the Jal Jeevan Mission, workers. Moreover, the Government an outlay of nearly Rs 3 lakh crore was proposed to make suitable amendments RENTAL LANDSCAPE SUPPLY announced to improve water supply in the legislations regarding debt financing In line with the previous quarters, While new housing projects surged across 4,400 urban local bodies, and of Infrastructure Investment Trusts (InvITs) the rental market remained grim as across cities, QoQ, numbers remained Rs 18,000 crore were allotted for and Real Estate Investment Trusts (REITs) professionals and students continued significantly lower than a year augmenting public transport, such as by Foreign Portfolio Investors (FPIs), to operating from home. A surge in COVID ago. About 600 new projects were bus and metro networks in Tier I and ease access to finance for InvITs and REITs, cases further delayed the reopening of launched this quarter. Supply in the Tier II cities. While the Government therefore augmenting funds for the realty organisations and institutions, marring secondary market also improved as did not provide any direct benefits to sector. Apart from these inclusions, there hopes of a revival in the rental market. property owners attempted sales while homebuyers, it tabled several fiscal was no mention of key industry demands Rentals are reportedly down by 10-15 maintaining their ‘asks’ and avoiding benefits to boost the economy and such as reduction of GST slab rate or percent since last one year. massive negotiations. address unemployment at large. reintroduction of Input Tax Credit (ITC). KOLKATA 3% DELHI NCR CHENNAI 3% SHARE OF NEW LAUNCHES 4% BANGALORE The quarter witnessed the launch of about 600 new residential projects in top eight metro cities. Mumbai led all cities 8% for the third quarter in a row with a 38 percent share in new and re-launched projects. Hyderabad surpassed Pune MUMBAI and took the second position with a 21 percent share. Interestingly, Delhi NCR again contributed the least with a AHMEDABAD 38% three percent share in the overall new unit additions; however, it reported a 70 percent jump in new launches, QoQ. 9% PUNE Bangalore, too, reported a nearly 10 percent growth in the number of new project launches in Jan-Mar 2021 vis-à-vis 14% Oct-Dec 2020. Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects HYDERABAD 21% MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK PMAY units find limited Infrastructure projects takers receive a push • The COVID-19 vaccine roll-out • Fractional ownership was popular The low-cost units allotted under the The allotment of Rs 26,000 crore improved office space leasing as high rental yields against low- Pradhan Mantri Awas Yojana (PMAY) in for Pune Ring Road, Purple Line in Pune by 10-20 percent in investment cost enticed small-scale Hadapsar, Kharadi and Vadgaon Khurd metro extension from Swargate Jan-Mar 2021, YoY. However, with investors. Definite has planned to in October 2020, saw limited traction to Nigdi and the soon-to-be- the vacancy levels still high, the offer 15,000 sq ft of office space amid the dozens of slum rehabilitation operational Vanaz-Ramwadi metro annual lease rates were down by in Magarpatta under fractional structures nearby and compromised are set to fillip the realty landscape over 15 percent. Viman Nagar, ownership. infrastructure. Of nearly 3,000 in neighbouring areas of Wagholi, Baner, Magarpatta and Kharadi • ESR announced the development units offered by the Pune Municipal Kesnand and Deccan Gymkhana, remained popular for Grade A of 38-acre industrial and logistics Corporation (PMC), over 60 percent among others. offices measuring 1,000-5,000 sq ft. facility in Chakan. Shapoorji Pallonji were unclaimed by the allottees. • Coworking spaces in Magarpatta, has also planned a 148-acre mixed- Kharadi and Kalyani Nagar attracted use project in Bavdhan. organisations operating with • Industrial spaces of 10,000-35,000 restricted workforce and requiring Pimpri-Chinchwad Smart sq ft area were in high demand in Civic bodies tighten the compact offices of 500-2,000 sq ft. noose on tax defaulters City to include more areas Chakan, the popular manufacturing hub in the city. Cash-strapped civic bodies cracked The Pimpri Chinchwad Smart City a whip on property tax-evaders to Limited’s (PCSCL) decision to bring replenish their coffers and meet the under-developed areas, such as annual targets. For instance, the Pune Ravet, Kiwale and Moshi, under the Cantonment Board (PCB) announced area-based development project its plans to seal over 250 properties is likely to spur realty growth in with an outstanding tax liability and the region. PMC has initiated the auction of 40 ceased properties. 99acres India’s No.1 Property Portal PUNE’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments Budget Localities based on Average Average Rental Jan-Mar 2021 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield -13% Active Listings (Rs per sq ft) (Rs per sq ft/month) 9% Within Rs 40 lakh Chakan 2,900-3,600 10 3.24% Talegaon 3,400-4,100 9 2.89% Rs 40 lakh - Rs 1 crore Wagholi 3,900-4,900 12 3.03% Undri 4,600-5,600 13 3.27% 4% Moshi 4,100-5,200 12 2.91% Rs 1 crore and above Wakad 5,800-6,800 17 3.09% Demand Kharadi 6,700-7,700 20 2.96% Baner 6,800-7,900 18 2.75% 51% 38%0% 32% 41% 17% 21% Supply Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above Note: Rental Yield has been calculated for a 1,000 sq ft apartment. Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments. Key micro-markets across BHK-configurations BHK-WISE DEMAND AND SUPPLY Configuration Localities based on Average Average Consumer Demand and Unit Size Property Prices Active Listings (Sq ft) (Rs per sq ft) 4% Jan-Mar 2021 1 BHK Chakan 550-570 2,900-3,600 Hadapsar 540-580 4,900-6,200 2 BHK Wakad 960-1000 5,800-6,800 -5% Wagholi 900-920 3,900-4,900 0% Ravet 900-910 5,100-5,900 3 BHK Kharadi 1600-1650 6,700-7,700 Baner 1400-1450 6,800-7,900 Demand 1% Hinjewadi 1350-1400 5,700-6,500 29% 24%0% 44% 48% 23% 23% 4% 5% Supply 1BHK 2BHK 3BHK 4BHK Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter.