Real Estate in Pune city- A feel good factor...

Pune real estate has been the most consistent markets across the country and the future seems very good because of lots of growth drivers and prevailing good economic conditions. Here are few factors responsible for this.

1. Since 2007-2008, the city has witnessed the launch of more than 200,000 units of which more than 150,000 units have been absorbed till Q3 2012, resulting in 23% remaining unsold; the reason behind the same is the rate of absorption is not able to match the pace new launches.
2. Construction activity concentrated more on eastern and western Pune, about 33%and 28% of the under construction units are located in West and East Pune respectively.
3. Strong growth of IT/ ITes and Auto & Auto Ancillary sector (17%) is one of the driving factors for Pune’s real estate growth and will continue to be for coming 5 years.
4. Currently the IT/ITeS sector accounts for 74% of total office space and this percentage is going to go up with new IT/ITes offices becoming operational in the coming years.
5. Office space in Pune witnessed growth from 20.4mn sq.ft. in 2007 to 64.7mn sq.ft; however the absorption has been slowing down leading to gradual increase in vacancy level. Presently the vacancy level stands at 26% as on Q3 2012.
6. Majority, almost 95% of overall office development in Pune is focused on eastern and western Pune.
7. In western Pune, the residential prices are bound to rise in majority of destinations with some destinations outperforming others. Destinations closer to Hinjewadi IT Park and along Pune-Mumbai By-pass will witness higher appreciation as compared to farther locations.
8. Hinjewadi, Wakad, Tathavadeand Ravet are expected to witness maximum price appreciation in Pune residential market; primary reasons being
i) 80% of office space located in western Pune concentrated in Hinjewadi; it increases importance of residential market in proximity.
ii) West Pune has become a self-sufficient zone, reducing dependence on Pune City.
iii) Due to present state social and physical infrastructure in the region, proximity to workplace has gained paramount importance for home buyers
Hinjewadi:
1. Since 2007, total of 15,000 units launched in Hinjewadi of which more than 11,000 units have been sold resulting to 76% absorption till date.
2. Prices in Hinjewadi will move up to Rs. 8000/sq.ft from average level of Rs. 4000/ sq.ft.; appreciation of about 100%.
3. Besides reasons mentioned above, growing preference of walk-to-office concept has made Hinjewadi most sought after destination among IT professionals.
Wakad:
1. Since 2007, total of 15,570 units are launched of which 12,864 units have been sold accounting to 82% absorption till date.
2. The prices in Wakad are expected to touch Rs. 8,600 / sq.ft mark in 2017 from present average level of Rs. 4,500 / sq.ft.; a 91% appreciation.
3. A drop in new launches in 2012 in region will help to decrease the unsold units from previous years.
Tathawade
1. 4 km from Hinjewadi, physical characteristics similar to Wakad but prices 5% less than that of Wakad.
2. Since 2010, a total of 1,400 units launched of which more than 1,000 units are absorbed; absorption 73%.
3. The prices in Tathawade are expected to touch Rs. 8,500 / sq.ft mark in 2017 from present average level of Rs. 4,300 / sq.ft; a 98% appreciation.
Ravet:
1. 9 km from Hinjewadi, relatively a new location
2. Since 2010, a total of 1,750 units launched of which 1,200 units are absorbed; absorption 70%.
3. Prices in Ravet will move up to Rs.7, 800/sq.ft from average level of Rs. 3,950/ sq.ft; appreciation of about 98%.

These are the excerpts from the recent reports from the a leading research agency..