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PUNE RESIDENTIAL MARKET UPDATE APRIL - JUNE 2020

Market Sentiment INSITE acres ’s No.1 Property Portal

FROM CBO’S DESK

A drastic drop in the number of new providing some relief from the residential launches and poor sales volume COVID-19-induced crisis. After some defined the ‘real’ story of residential setbacks, the traffic and responses on realty across metro cities in Apr-Jun 2020. 99acres returned to pre-COVID levels by Shortage of construction workers, liquidity the end of June 2020. A survey by 99acres constraints faced by developers and the revealed that 75 percent of its registered withdrawal of homebuyers impacted market buyers now prefer shortlisting or buying sentiment adversely. a property through real estate portals. Further, 60 percent of the participants Delhi NCR, Mumbai and Hyderabad lost averred that they would prefer undertaking the largest share of new launches and a virtual tour before physically visiting the reported a dip of 80-95 percent, each, project site. QoQ. Cumulatively, the period witnessed an addition of a mere 1,400 units in the Nonetheless, to witness a complete revival, top eight metros. The ensuing credit the industry would need more support from crunch with both buyers and developers the Centre beyond measures such as home is expected to shrink housing sales from loan moratorium and declaring COVID-19 as four lakh units in 2019-20 to 2.8 lakh units a Force Majeure event to witness revival. in 2020-21. While all metro cities reported status quo in average weighted capital prices, experts foresee average ‘asks’ in the resale segment dipping by an average of 10-15 percent in the months to come. To sustain businesses, several developers Maneesh Upadhyaya underwent digital transformation with Chief Business Officer virtual project launches and e-site visits 99acres.com COVID-19 AND NATIONAL REAL ESTATE OUTLOOK

HOME BUYING SENTIMENT Home buying sentiment remained muted during April due to the nationwide lockdown; with enquiries picking up slight pace in June. Genuine homebuyers flocked the market looking for attractive schemes and discounts. NRI demand, too, resurged, with some conversions in the mid-income housing bracket across cities. IMPACT ON INDUSTRY The COVID-19 crisis disrupted the supply chain of realty raw materials, and led to reverse migration of labourers and fund constraints PROPERTY PRICES at developers’ end. The sector went through a major digital While the negotiation window widened up to 10-15 percent transformation as developers shifted online to market their projects across budget segments, any actual correction in prices was and engage with customers, and Government bodies, such as NCLAT not noticed. Barring Delhi NCR, all metros maintained status and RERA started addressing homebuyers online. quo in average weighted capital ‘asks’, QoQ. With wafer-thin The Apr-Jun 2020 quarter saw the lowest number of new launches margins at the hand of developers, any price correction in since 2013 and sales remained 75 percent lower than the previous future is unlikely. quarter. Invoking of Force Majeure brought some relief as ongoing projects got up to a nine-month extension under Real Estate (Regulation and Development) Act, 2016. The suspension of Insolvency RENTAL LANDSCAPE and Bankruptcy Code (IBC) for a year, too, is a relief for developers. Amid restrictions to move around, the rental market remained intact in Apr-Jun 2020. There was no movement in average ‘asks’ across cities, except for some discounts and IMPACT ON HOMEBUYERS leeway offered by property owners to support the tenants With ongoing projects delayed by at least six months, homebuyers struggling financially. PG accommodations and guesthouses expecting possessions received a setback. Job losses and pay cuts took the brunt as people moved to their hometowns due to affected the paying capacity of homebuyers, who shelved their buying an extended lockdown. decisions in the wake of market uncertainties and expectations of price cuts. While reduced home loan interest rates from most banks make it an opportune time to invest in real estate, a large share of prospective SUPPLY homebuyers await more clarity in the ensuing months. New project launches remained nil during the quarter and progress on ongoing projects suffered on account of reverse The extension of the Credit-Linked Subsidy Scheme (CLSS) under migration of labourers and disruptions in the supply chain. Pradhan Mantri Awas Yojana (PMAY) might be a benefit for those Property owners unwilling to sell at a reduced price exited looking for affordable homes. Existing homeowners welcome home from the secondary market. Unsold inventory stood at 6 lakh loan moratorium of six months announced by the Government in April. units at the end of Apr-Jun 2020.

acres INSITE : 5 India’s No.1 Property Portal MARKET MOVERS Infrastructure projects take a hit Temporary suspension of crucial infrastructure projects, such as the High Capacity Mass Transport Route (HCMTR), two grade separators and redevelopment project, due to the labour shortage and financial strain post the nationwide lockdown may slacken the realty growth in the neighbouring localities. Work on Shivajinagar-Hinjewadi Metro corridor also moved at a slow pace in the quarter.

Deadline for tax amnesty scheme increases by a month The extension of the tax amnesty scheme until June 30 came as a respite to property owners. Until May 2020, about 673 properties were registered in Pune, generating revenue of around Rs 20 crore, which is close to 60 percent of the last year’s tax receipts.

Slum redevelopment gains steam COMMERCIAL The Pune Municipal Corporation (PMC) undertook slum redevelopment projects in Bhavani Peth, Kasewadi, Harkanagar, Parvati and Yerwada. REAL ESTATE Apart from benefitting about 11 lakh people, the move would decongest these areas and create new residential opportunities. OUTLOOK

Construction activities commence in • The financial crisis took a hit on the expansion plans of commercial non-containment zones operators. Despite flexible payment and subvention plans being rolled The resumption of construction activities in the non-containment zones out by developers, office space leasing declined across board. offered a big respite to the developers. While disrupted supply chain of raw • Compact spaces up to 1,500 sq ft witnessed a revival in enquiries in materials and labour shortage have been a few challenges before builders, , Hinjewadi and ; however, with investors anticipating around attempts are being made to cover for the lost days. 20-30 percent price cut, deal conversions remained low.

• Remote working coupled with the IT/ITeS firms scaling down their business operations impaired the demand in the otherwise popular co-working segment. Around 25 percent of the start-ups in Pune temporarily halted their operations or closed down in Apr-Jun 2020.

• Mapletree leased seven lakh sq ft of office space in a logistics park in Chakan. This was the only major commercial deal that materialised in Pune. Pre-leasing, a popular trend until the last quarter, took a backseat, acres resulting in a glut of Grade A spaces in the East and West Pune. India’s No.1 Property Portal INSITE : Pune 7 * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com PUNE’S REALTY AT A GLANCE

Property Rental Prices ‘Asks’

Price movement in key micro-markets

Localities Apr-Jun 2020 QoQ YoY Rental % Change % Change Yield Wagholi Rs 3,900 - 4,900 4% 8% 3% Demand Supply Baner Rs 6,900 - 7,900 -1% 3% 3% Rs 4,880 - 6,710 1% 2% 0% Hinjewadi Rs 5,240 - 6,010 1% 0% 3% Undri Rs 4,630 - 5,480 2% 2% 3% Rs 8,600 - 10,600 1% 1% 2% * Property prices represent quarterly change * Rental ‘asks’ represent yearly change * Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com Rs 6,200 - 7,400 1% -2% 3% Wakad Rs 5,980 - 6,970 -1% 0% 3% Rs 6,690 - 7,630 -1% 1% 3% Rs 6,900 - 7,470 2% 0% 3%

* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com ** Rental Yield has been calculated for a 1,000 sq ft apartment

INSITE : Pune 9 acres DEMAND & SUPPLY India’s No.1 Property Portal DYNAMICS 99ACRES’ 18% OUTLOOK 12% Over two months of lockdown and staggered re-opening of construction activity led to several disruptions in the realty market of Pune in Apr-Jun 2020. The city recorded about 40 percent dip in the residential enquiries; however, quality leads from genuine buyers emerged 37% as a silver lining. The fiscal crisis and demand slippage narrowed down the conversions to less than 50 percent. 34% Close to 1,800 units were sold in Apr-Jun 2020 as 51% opposed to 5,000 properties in Jan-Mar 2020.

Barring a few virtual launches by Category A developers, such as Puravankara, Kolte Patil and Godrej, majority of the builders deferred their new project announcements, resulting in about 65 percent decline in the inventory 48% addition, QoQ. Around 16 projects, including phases were launched in the studied period.

Investors leveraging the ongoing sentiment occupied nearly 25 percent of the demand share as against 5-10 percent in the pre-COVID world. Grade A projects with an increased focus on hygiene amenities, including in-built fogging equipment, multi-tier water filtration and contemporary cleaning devices, garnered traction Demand Supply irrespective of 1-2 percent higher maintenance cost.

Affordable Housing Unsold inventory in Pune in the quarter ending June (Within Rs 40 lakh) Mid-income Housing 2020 stood at approximately 96,500 units. The number (Rs 40 lakh - Rs 1 crore) of months required to dispose of the current residential Luxury Housing stock is 12. (Rs 1 crore and above)

* Graph depicts demand and supply of residential inventory across budget segments in the studied INSITE : Pune 11 quarter INSITE : Pune 11 KEY HIGHLIGHTS

The unchanged Ready Reckoner Rates (RRR), liquidity crunch and distressed demand subdued homebuying in Pune. Nevertheless, despite the slowdown, developers remained reluctant to offer rebates, which kept the property prices stable in Apr-Jun 2020.

With the extension of the work from home policy, CAPITAL & developers anticipate a hike in demand for bigger residential formats such as 2 BHK units with study and RENTAL 3 BHK configurations in the ensuing quarters. Localities, such as , Balewadi, Hinjewadi, Wakad, Kharadi NX and Lohegaon, remained popular housing hotspots. Apart from new launches by Grade A builders, these areas also recorded over 70 percent of the total conversions in the city. Configurations in Rs 45-65 lakh ticket size comprised of maximum transactions.

6% 6% 6% 6% Dhankawadi, and Wanwadi were preferred by the end-users. While Wanwadi in Central Pune witnessed 5% 5% 5% 5% demand exceeding supply, price-competitive Dhankawadi 4% 4% and Vadgaon Budruk benefitted from the proximity to Pune- Bangalore Highway and Mumbai-Pune Bypass, respectively. 3% 3% Average rents in Pune surged by four percent in Apr-Jun 2% 2% 2020, as against the same quarter last year. Keshav Nagar, Viman Nagar and clocked the maximum rental growth 1% 1% 1% 1% of seven percent, each, YoY. While demand in Keshav Nagar grew on the back of contiguity to IT Park,

Baner Wakad Bavdhan Warje gained momentum due to its seamless connectivity to Banner, Aundh and Hinjewadi IT hub. Viman Nagar, Wagholi Hinjewadi Undri Hadapsar Kharadi Pimple Kothrud Saudagar an epicentre of retail and IT/ITeS Centers, also remained -1% -1% -1% popular due to its commercial prominence and vicinity to Capital Lohegaon International Airport.

Rental -3%

* %change represents quarterly capital movement and yearly rental movement INSITE : Pune 13 CONCLUDING NEW LAUNCHES 1% REMARKS DELHI NCR Despite the record-low interest rates at 7.35 percent, 2% KOLKATA enquiries for affordable homes pegged within Rs 45 lakh 5% reeled under pressure. Financial uncertainty kept this HYDERABAD segment of buyers out of the market. Ready homes up to 1,200 sq ft by reputed developers accounted for maximum 26% enquiries. Under-construction units, however, bore the brunt AHMEDABAD of sluggish development activity. Developers having a robust 11% online presence managed to stay afloat through digital CHENNAI enquiries, whereas those with limited virtual presence or no presence at all struggled for sustenance. 11% MUMBAI

20% 24% BANGALORE PUNE BUDGET-WISE DEMAND SUPPLY The data depicts share of new launches across metro cities in the studied quarter

5% 12% 14% 11% 18% 19% 17% 20% 14% 24% 25% 17% 29% 34% 41% 40% 43% 22% 36% 37% 29% 36% 23% 48% 41% 40% 39% 44% 25% 34% 48% Demand Supply 35% 78% Affordable Housing 48% 64% 53% 51% 57% 40% 47% 40% 34% 37% 34% Mid-income Housing 31% -5% 26% 22% 18% Luxury Housing -6%

DELHI NCR MUMBAI BANGALORE PUNE CHENNAI HYDERABAD AHMEDABAD KOLKATA

INSITE : Pune 15 * Graph depicts demand and supply of residential inventory across budget segments in top eight metro cities in the studied quarter INSITE : Pune 15 acres ANNEXURES India’s No.1 Property Portal

CAPITAL VALUES RENTAL VALUES

Locality Apr-Jun 2020 Locality Apr-Jun 2020 Locality Apr-Jun 2020 Locality Apr-Jun 2020

Akurdi 6650 Moshi 4900 Akurdi 16 Phursungi 14 Aundh 9430 Mundhwa 6150 Anand Nagar 16 17 Balewadi 7150 Narhe 4910 Aundh 22 Pimple Nilakh 18 Baner 7700 7100 Balewadi 17 Pimple Saudagar 18 Bavdhan 6990 Phursungi 4750 Baner 18 10 5400 Pimple Gurav 6250 Bavdhan 15 Pisoli 12 Bhosle Nagar 13400 Pimple Nilakh 7800 Bhosari 14 Prabhat Road 26 Bhugaon 5750 Pimple Saudagar 7290 Bhosle Nagar 23 Punawale 12 Bibwewadi 8300 Pirangut 4100 Bhusari Colony 19 18 Boat Club Road 13700 Pisoli 4400 Bibwewadi 18 Ravet 14 Camp 8950 Prabhat Road 15150 Boat Club Road 29 Sadashiv Peth 23 Chakan 3550 Punawale 5500 Chakan 10 Salunke Vihar 15 Charholi 5000 Rahatani 7050 Chikhali 12 Sasane Nagar 14 Chikhali 5050 Ravet 5650 Dhanori 15 Senapati Bapat Road 25 Dhanori 5100 Sadashiv Peth 10120 12 Shastri Nagar 25 Dighi 5250 Salunke Vihar 6400 24 Nagar 25 Erandwane 12300 Sasane Nagar 5030 Hadapsar 16 Shivane 11 Fatima Nagar 6500 Senapati Bapat Road 12640 Handewadi 12 Sopan Baug 22 Ghorpadi 9200 Shastri Nagar 8200 Hinjewadi 15 Talegaon 10 Hadapsar 6070 Sopan Baug 10300 16 Tathawade 15 Handewadi 4450 Talegaon 3950 26 16 Hinjewadi 5820 Tathawade 6200 Karve Nagar 19 Tingre Nagar 17 Kalyani Nagar 9900 Thergaon 6280 14 Undri 12 Karve Nagar 9380 Tingre Nagar 5780 Keshav Nagar 15 Vadgaon Budruk 12 Katraj 5200 Undri 5100 Kharadi 18 Veerbhadra Nagar 16 Keshav Nagar 6150 Vadgaon Budruk 4900 Kondhwa 14 Viman Nagar 25 Kharadi 7250 Viman Nagar 8310 29 Vishal Nagar 18 Kiwale 5000 Vishrantwadi 6740 Kothrud 21 Vishrantwadi 18 Kondhwa 5690 Wadgaon Sheri 7050 Magarpatta 22 Wadgaon Sheri 18 Koregaon Park 11500 Wagholi 4870 13 Wagholi 12 Kothrud 10100 Wakad 6650 Moshi 12 Wakad 17 Lohegaon 5170 Wanowrie 7500 Mundhwa 16 Wanowrie 17 Magarpatta 8100 Wanwadi 7850 Narhe 12 Wanwadi 17 Mahalunge 5800 Warje 6700 Nigdi 16 Warje 16 Manjri 5290 Yerwada 7310 Pashan 18 Yerwada 21

*All prices are per sq ft rates *All prices are per sq ft rates INSITE : Pune 17 METHODOLOGY The Insite Report by 99acres.com captures the quarterly capital trends, the annual rental analysis of residential apartments and rental yield in top 10 popular micro-markets across key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on D S PS 99acres.com in Apr-Jun 2020. U SELL RENT PRPERT

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