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INSITE PUNE RESIDENTIAL MARKET UPDATE JULY - SEPTEMBER 2020 Market Sentiment WHAT’S INSIDE? • Impact of COVID-19 on Indian Real Estate • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted Pune’s realty market in Jul-Sep 2020 • 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 Jul-Sep 2020 quarter set the pace for the recovery of Indian developers have further fueled the penchant for ready or near-ready residential real estate market. Post an initial lull in sales and new housing units. There seems to be a newfound demand for independent launches in the previous quarter, the current quarter came as a breather houses and builder floors, which offer increased privacy and scope for as sales resurged by almost 2.5 times of the pre-COVID levels. Both Delhi social distancing, as opposed to residential apartments. NCR and Mumbai saw a significant improvement in transactions, QoQ, as end-users flocked to leverage the lucrative deals floating in the market. A gradual improvement in the realty market was also evident from the Price correction, unlike anticipated, remained a far cry; however, with owner listings posted on 99acres, which went up by seven percent against a negotiation window of up to 10-15 percent, the deals closed in at a the pre-COVID times. Buyer responses also reported a 30 percent surge in reduced price of 2-5 percent of the pre-COVID levels. the same time period. New launches went up, QoQ, but remained lower than the previous year. On the policy framework front, a fiscal stimulus of Rs 10,000 crore for Majority of the developers focused on completing the ongoing projects, Maneesh Upadhyaya stuck realty projects, along with the sustenance of Repo Rate at four which were stuck during the nationwide lockdown. While work on Chief Business Officer percent, an all-time low, are likely to push the market towards a revival almost all housing projects resumed in the current quarter, a lot of them 99acres.com in the ensuing quarters. The upcoming festive season may see a further continue to face delays spanning quarters. Liquidity constraints with the improvement in the absorption of residential units, across cities. COVID-19 AND REAL ESTATE NATIONAL OUTLOOK IMPACT ON HOMEBUYERS IMPACT ON INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES After an initial set back amid pay cuts Even as supply chain reopened in Home buying sentiment improved The resale segment remained under and job losses, homebuyers were seen Jul-Sep 2020, a ban on Chinese imports as public sector banks and private pressure with deals closing at a returning to the market in Jul-Sep 2020. impacted the cost of development in players slashed home loan interest 2-5 percent discounted rate on average. Reduced home loan rates, sweetened the realty landscape. Developers cited rates to a 15-year low. This, along Developers also kept new unit prices deals by developers and more scope of increased expenses, and thus, little with resumption of construction unchanged even as some spoke of negotiations in the resale segment were scope to reduce prices in the primary work, helped take the enquiries up by increased costs amid a ban on Chinese seen as the key drivers. The quarter market. Yet, in a bid to offload the 80 percent of the pre-COVID times. imports. However, initial speculations of continued witnessing the popularity existing inventory, several schemes Developers reported a 50 percent hefty price corrections did not hold true of ready housing units, and improved were introduced in the quarter. recovery in the number of transactions. for either of the segments. demand for independent houses and Digital transformation continued as builder floors in most metro cities. developers took to the online medium RENTAL LANDSCAPE SUPPLY Window shoppers exited and genuine to interact with potential homebuyers Rental market remained in doldrums With an addition of over 31,000 units homebuyers were seen leveraging at various stages of the buying cycle. despite the opening up of the in metro cities, new launches went up the discounts available in the market. Several governmental procedures nationwide lockdown. Tenants avoided by 4.5 times, QoQ. The resale segment, Noticeably, the quarter reported shifted online as organisations adopted moving as the majority of offices too, reported an improvement as renewed interest from the NRI homebuyer to the new normal. The infusion of continued with the work-from-home several property owners returned to community against the backdrop of Rs 10,000 crore to aid the completion model. Resultantly, the rental rates the market after lockdown restrictions depreciating rupee and attractive deals of stuck realty projects was hailed by did not see any movement and offtake were gradually lifted. Unsold inventory in the new home category. the industry. was meek in both residential and stood at 4.40 lakh units at the end of commercial segments. September 2020. KOLKATA DELHI NCR 1% CHENNAI 3% 1% SHARE OF NEW LAUNCHES AHMEDABAD 16% MUMBAI The quarter witnessed the launch of about 240 new residential projects in top eight metro cities. Despite being 25% severely hit by the Coronavirus pandemic, Mumbai led all cities with a 25 percent share in new and re-launched projects. Pune, Hyderabad, Bangalore and Ahmedabad followed suit with a 16-19 percent share, each. Delhi NCR made a meagre three percent share of the total new launches, with a few projects in Greater Noida, Ghaziabad and Gurgaon. PUNE Kolkata and Chennai reported minimal new activity from developers. 19% BANGALORE 17% Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects HYDERABAD 18% MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK FSI hike along Hinjewadi- Railway infrastructure Shivajinagar metro to expansion plans pick up • The work-from-home trend post the require smaller footprint usher realty growth the pace COVID-19 debacle took a massive preferred co-working spaces; beating on the commercial market however, the demand was nearly The Maharashtra government’s The proposed Pune-Nashik High- in Pune as office space leasing 80-90 percent down as against the decision to increase the Floor Space Speed Rail Corridor and the under- declined by over 85 percent in Jan-Mar 2020 quarter. Index (FSI) in the areas within the construction PCMC-Swargate Jul-Sep 2020, as against the 500-meter radius of the upcoming metro line that would be partially • Sadashiv Peth, Karve Nagar, pre-COVID-19 times. Hinjewadi-Shivajinagar metro corridor operational by December 2020, Narayan Peth, Baner and Balewadi would fillip the realty landscape in may prove as a game-changer for • Despite nearly 20 percent dip in the recorded a couple of rental northwest Pune, benefitting over the residential pockets of Alandi, lease rate, companies postponed transactions for stand-alone 20 locales alongside. These include Chakan, Khed, Manchar, Bhosari, their expansion plans citing tough commercial shops and compact Baner, Balewadi and Hinjewadi, and Hill Range, among others. operational environment. Many office spaces spread across among others. even opted out of renting amid 1,000 sq ft area. New completions the growing financial losses and bore the brunt due to labour exacerbated business conditions. shortage, meek pre-leasing activity and financial instability • Small businesses that appreciate of developers. flexible commercial terms and Hike in RRR may dampen Online registration of sale home buying sentiment agreements to ease the The increment in the average Ready process Reckoner Rates (RRR) in Pune by RERA-registered builders will now 3.91 percent, the maximum across have access to an online software Maharashtra, may suppress the in their offices that will allow first- housing demand in the city. Pashan, time homebuyers to register their Bibwewadi, Bhavani Peth and the sale agreements digitally. The Cantonment area remain the worst-hit downloadable document will be with 15-20 percent hike in their circle ready in two days after scrutiny from rates since September 12, 2020. the sub-registrar department. 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 Jul-Sep 2020 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield 10% Active Listings (Rs per sq ft) (Rs per sq ft/month) -14% Within Rs 40 lakh Chakan 2,900-3,600 10 3.17% Pisoli 3,000-3,900 12 3.29% Rs 40 lakh - Rs 1 crore Wagholi 4,000-4,900 12 3.08% Hadapsar 5,100-6,200 19 4.00% Hinjewadi 5,000-5,900 17 3.47% 4% Rs 1 crore and above Baner 6,300-7,800 18 2.82% Demand Kharadi 6,400-7,400 21 3.37% Wakad 5,920-6,900 18 3.12% 47% 33%0% 37% 47% 16% 20% 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 -6% Active Listings (Sq ft) (Rs per sq ft) Jul-Sep 2020 1 BHK Kiwale 580-600 4,400-5,200 1% Pimple Saudagar 630-650 6,200-7,300 2 BHK Hadapsar 800-920 5,100-6,200 Aundh 970-990 8,400-9,500 Ambegaon 850-880 4,600-5,600 3 BHK Sopan Baug 1,850-1,900 8,800-10,400 4% Hinjewadi 1,300-1,350 5,000-5,900 Demand Wagholi 1,300-1,400 4,000-4,900 1% 36% 37%0% 51% 45% 11% 15% 2% 3% 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.