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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 ’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 , Purple Line in Pune by 10-20 percent in investment cost enticed small-scale , and Vadgaon Khurd metro extension from Jan-Mar 2021, YoY. However, with investors. Definite has planned to in October 2020, saw limited traction to 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 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, , Magarpatta and Kharadi • ESR announced the development units offered by the Pune Municipal Kesnand and , 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 attracted use project in . organisations operating with • Industrial spaces of 10,000-35,000 restricted workforce and requiring - 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.

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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. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments. Note: Supply is basis properties listed on 99acres.com in the studied quarter. Demand is basis queries received on 99acres.com in the studied quarter. INSITE : PUNE 9 Independent House/Villa Independent/ SHARE OF 4% Builder Floor 99ACRES’ OUTLOOK 2%

PROPERTY TYPES The homebuying sentiment in Pune Demand outpacing supply boded well improved in Jan-Mar 2021. Stamp duty for the unsold residential stock in Pune. rate at three percent until March 2021 From 92,000 units in Oct-Dec 2020, the Property Status against five percent till Auguest 2020, inventory overhang declined to around coupled with the lucrative home loan 87,000 units in Jan-Mar 2021, and the Ready to Move interest rates for first-time homebuyers, quarters required to dispose of this stock 70% boosted residential demand across stand at 12. Maharashtra, including Pune. While 30% enquiries were stable, the conversion The rental scenario, however, remained Under Construction rate witnessed a steep hike, QoQ. worrisome amid plummeting demand. Resultantly, over 14,000 property Despite reduced rentals, the vacancy rate Residential Apartment registrations were recorded in Pune in the segment continued to grow, QoQ, Note: The data depicts the share of property types and the status of 94% in Jan-Mar 2021. Of this, nearly 90 as many tenants terminated their rent completion of residential projects in Pune in the studied quarter. percent were new registrations, spilling agreements due to the rising COVID-19 over from the previous quarter. cases. The prolonged work-from-home trend also marred rental sentiment The first quarter of the year 2021 across locales. And, the situation is recorded the addition of over 9,500 unlikely to improve anytime soon amid residential units. Grade A builders, such the mass exodus of the migrant labours as Goel Ganga Developers, Kolte Patil to their hometowns and the government RENTAL Developers, Godrej Group and Shapoorji taking stringent measures such as Pallonji Group, accounted for the implementation of partial lockdown to LANDSCAPE maximum share of fresh housing supply. curb the spread of COVID-19.

Key micro-markets based on consumer demand and active listings

Localities Most Supplied Market Rental Rates YoY % Rental Units Share (Rs per Month) Change in Rental ‘Asks’

Wagholi 2BHK 56% 9,000-11,000 0% 1BHK 28% 7,000-8,000

Hinjewadi 2BHK 53% 12,500-15,000 -2% 1BHK 28% 9,000-11,000

Hadapsar 2BHK 42% 13,500-18,000 6% 1BHK 36% 7,000-11,000

Wakad 2BHK 63% 14,000-16,000 -6% 3BHK 23% 17,000-20,000

Kharadi 2BHK 37% 18,000-21,000 0% 3BHK 29% 26,000-30,000

Note: Average rental rates and supply have been calculated as per listings posted on 99acres.com in the studied quarter. Key micro-markets have been selected based on expressions of interest raised on 99acres.com in the studied quarter.

INSITE : PUNE 11 KEY HIGHLIGHTS CONCLUDING REMARKS

The average weighted property rates in the city remained stable, Similar to Mumbai, infrastructure push, lower home loan interest QoQ. Developers keen to scale up the sales volume to service rates, reduced stamp duty and around 5-7 percent price negotiations their debt obligations adopted a cautious stance, keeping the by developers brought home buyers back to the market in Pune. property prices unchanged. While the demand for under-construction units improved, ready homes grabbed over 50 percent of the market popularity on account Housing units configured as 2 BHK in Rs 40-80 lakh budget of zero-GST. The rising COVID-19 cases impaired rental popularity; remained the favoured ones. Ravet, Mahalunge, , Hinjewadi, Bavdhan and Kharadi, in proximity to the IT/ITeS hubs, however, the capital market remained unaffected as serious home captured nearly 70 percent of the market demand. buyers looked at saving lakhs on account of above mentioned subsidies and sops. The city, however, needs to meet the growing Lack of dedicated workspace and the ongoing work-from-home demand of 2.5 BHK and 3 BHK units. With several organisations trend soared enquiries in 2.5 BHK units for the first time in the deciding on permanent work-from-home policy, the working last many years; however, restricted supply in the category population is largely preferring to shift to bigger houses. shifted homebuyers’ interest to 3 BHK units.

Demand for luxury homes in Rs 1-1.5 crore price bracket clocked a whopping 20 percent YoY growth against the 3-5 percent increase captured in the previous quarters. Significant savings due to the stamp duty cut boosted popularity of luxury units in , Magarpatta and Kharadi.

Manjri, Hadapsar, Ravet, and Hinjewadi, in proximity to the commercial hubs and the proposed metro extension, and the Mumbai-Bangalore Highway remained builders’ cynosures, accounting for over 60 percent of the new housing supply. Maximum new additions were in the affordable and mid-income budget segment due to increased popularity of PMAY benefits.

NIBM, Mundhwa, Wagholi and Lohegaon remained beset with a sizeable portion of unsold inventory. Excess supply against demand, high inventory cost and compromised infrastructure kept buyers away from these housing locales.

Rental demand in Pune dipped by over 30 percent in the studied quarter against Jan-Mar 2020. With offices operating at 25-30 percent capacity and coaching institutes and colleges still continuing the online teaching model, rental demand remained meek for the fourth quarter in a row. Many tenants terminated their contracts or cancelled their renewals, which spiked the vacancy levels and impaired the rentals by 10-15 percent, YoY.

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CAPITAL VALUES RENTAL VALUES

Locality Jan-Mar 2021 Locality Jan-Mar 2021 Locality Jan-Mar 2021 Locality Jan-Mar 2021

Akurdi 6800 Moshi 5000 Akurdi 16 Phursungi 14 Aundh 9450 Mundhwa 6300 Anand Nagar 16 17 7470 Narhe 4900 Aundh 21 Pimple Nilakh 18 Baner 7800 7200 Balewadi 18 18 Bavdhan 6900 Phursungi 4700 Baner 18 10 5900 Pimple Gurav 6000 Bavdhan 16 Pisoli 12 Bhosle Nagar 13500 Pimple Nilakh 8300 Bhosari 14 Prabhat Road 27 Bhugaon 5900 Pimple Saudagar 7400 Bhosle Nagar 23 Punawale 13 Bibwewadi 8200 Pirangut 4400 Bhusari Colony 20 17 Boat Club Road 13700 Pisoli 4200 Bibwewadi 16 Ravet 15 Camp 8900 Prabhat Road 15300 Boat Club Road 28 Sadashiv Peth 24 Chakan 3570 Punawale 5746 Chakan 10 Salunke Vihar 16 Charholi 4700 Rahatani 7100 Chikhali 13 Sasane Nagar 14 Chikhali 5300 Ravet 5800 Dhanori 17 Senapati Bapat Road 25 Dhanori 5200 Sadashiv Peth 10250 12 Shastri Nagar 24 Dighi 5600 Salunke Vihar 6810 23 Nagar 21 Erandwane 12800 Sasane Nagar 4800 Hadapsar 18 Shivane 11 Fatima Nagar 6850 Senapati Bapat Road 12450 Handewadi 13 Sopan Baug 22 Ghorpadi 9200 Shastri Nagar 7900 Hinjewadi 16 Talegaon 9 Hadapsar 6150 Sopan Baug 10450 Kalewadi 15 Tathawade 16 Handewadi 4520 Talegaon 4000 Kalyani Nagar 25 Thergaon 16 Hinjewadi 6050 Tathawade 6200 Karve Nagar 20 Tingre Nagar 18 Kalyani Nagar 10000 Thergaon 6450 15 Undri 13 Karve Nagar 9500 Tingre Nagar 5600 Keshav Nagar 17 12 Katraj 5500 Undri 4900 Kharadi 20 Veerbhadra Nagar 17 Keshav Nagar 6000 Vadgaon Budruk 4200 Kondhwa 14 Viman Nagar 23 Kharadi 7600 Viman Nagar 8700 29 Vishal Nagar 18 Kiwale 5100 Vishrantwadi 6850 Kothrud 21 Vishrantwadi 18 Kondhwa 5880 Wadgaon Sheri 7150 Magarpatta 22 Wadgaon Sheri 19 Koregaon Park 11000 Wagholi 4850 13 Wagholi 12 Kothrud 10400 Wakad 6700 Moshi 12 Wakad 17 Lohegaon 5400 Wanowrie 7800 Mundhwa 18 Wanowrie 18 Magarpatta 8100 Wanwadi 8300 Narhe 13 Wanwadi 18 Mahalunge 6100 6800 Nigdi 16 Warje 17 Manjri 5700 Yerwada 7900 Pashan 17 Yerwada 22

*All prices are per sq ft rates *All prices are per sq ft rates INSITE : PUNE 15 METHODOLOGY

The Insite Report by 99acres.com properties across varied budget captures the trends in the capital segments and BHK configurations. and rental markets across top The report also gives insight into eight metro cities – Delhi NCR, the key micro-markets based on Mumbai Metropolitan Region consumer demand and active listings (MMR), Bangalore, Pune, Chennai, in the rental market. While demand Hyderabad, Kolkata and Ahmedabad. is a function of expressions of interest In order to assess the prevailing raised on 99acres.com, supply is sentiment, the report delves based on property listings posted on FINDdeep into BEST demand OPTIONS and supply TO of 99acres.com in Jan-Mar 2021. U SELL RENT PRPERT

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