PUNE REAL ESTATE MARKET TRENDS
Giving an overall analysis of the global economic outlook Anuj Dhody, Executive Director, City Head - Pune, Head - Advisory & Transaction Services - Pune, CBRE stated, “Economic trends are faltering globally, leading to potential escalation in oil prices amid geopolitical tensions; the U.S. sees slowed momentum. Conversely, India experiences buoyant growth across sectors, with a remarkable 30% surge in 2023's residential sales as projected by the government.” Gulzar Malhotra, CEO, Gera Development, concurred, “Global shifts are impacting economies significantly, as seen in various sectors including India's S&P; a substantial trans- formation is anticipated. Despite prevailing caution induced by traditional perspectives, the stability of India's govern- ment, along with burgeoning financial systems, presents a compelling case for optimism about future developments.” Sharing his perspective on the predominant economic aspect influencing India as a nation, and explain- ing its connection to the real estate industry, Shashank Paranjape, Managing Director, Paranjape Schemes (Construction) Ltd, said, “Real estate serves as an indica- tor of economic growth, exhibiting significant increases in sales and prices post-pandemic. The trend towards larger homes with more spacious layouts is noteworthy, offering both cost-efficiency and heightened profitability for developers over the past eighteen months.” Growth in the real estate sector necessitate a si- multaneous consideration of market demand and supply shared Ranjit Naiknavare, Director, Naiknavare Developer. “Post-pandemic, the real estate sector is flourishing, particularly in Pune where it eclipses other Indian markets with 90,000 units delivered recently. While the upward trajectory is bolstered by strong leadership and policies, a tempered strategy remains essential for enduring stability.” Sachin Bhandari, Executive Director & CEO, VTP Realty added, “The pandemic has spurred notable growth in the real estate sector, underscoring the value of owning a home. While current trends suggest a cautious approach due to transient economic factors, India's demographic strength supports an optimistic long-term perspective.” Commenting on the popularity of integrated developments J.K. Bhosale, Director, Amanora Park Town, stated, “The economic outlook for India has shifted towards a more optimistic view, endorsing the country's advancements in numerous sectors. Maharashtra re- mains economically tenacious amidst adversities, with Pune's progress epitomized by burgeoning residential communities, largest shopping centres alongside prospering commercial enterprises.” THE REGULATED REAL ESTATE The establishment of RERA has mitigated the real estate industry's chronic transparency issues, thus enhancing consumer trust. Remarking on the progress in governance and the streamlining of governmental approvals within the real estate sector, Shashank Paranjape stated, “While laws like RERA have increased developer transparency, government processes remain opaque and in need of significant improvement.” Ranjit Naiknavare added, “Accountability and trans- parency are now mandated in our industry because RERA enforces precise deadlines for property handovers. How- ever, the pragmatic view is that increased accountability has inadvertently escalated corruption, since government officials exploit our urgency for permissions to extract undue advantages. As developers, we navigate these challenges—be they from government or activist pressures—to deliver our projects on time, an endeavor that requires considerable resolve in today's times.” TECH DRIVEN REAL ESTATE In today's technologically-driven world, India's focus on how technology impacts the real estate sector is undeniable says Gulzar Malhotra. “Technological impact has evolved over the past decades, enhancing our innovative capabilities through ded- icated labs that refine our models and improve our creative potential. Artificial intelligence continually transforms by advancing beyond memory retention to in-depth analysis and thoughtful processing, thereby positively influencing various domains. This leads to advancements in fields like construction technology, client engagement, and delivery of quality products and services to customers.” J.K. Bhosale shared his perspective, “While AI has been applied to many areas, the construction industry has lagged behind. The industry relies heavily on manual labor and has had limited mechanization. While AI will eventually be useful to improve efficiency, reduce costs, and improve quality, its application to the construction industry will be slow and may take some time to become a regular part of industry practice.” Anuj Dhodi added, “Engagement in a mutual and beneficial cooperation with governmental entities is imperative for advancing living standards. CBRE strongly advocates for technologically advanced sustainable practices, rejecting noncompliant proposals, and pursuing innovations such as green leasing.” LAND TRANSACTIONS It has been observed that there is a noteworthy es- calation in land transaction volume within Pune. Sachin Bhandari articulated, “The real estate market is expe- riencing a significant influx in land transactions, driven by a scarce supply of high-quality raw materials and consequently, competitive pursuits for available plots. Many developers are resorting to joint venture and joint development agreements despite the inherent risks, due to limited options. It is imperative that we maintain cost discipline during land acquisition to prevent escalating project expenses and preserve market affordability.” Anuj Dhodi added, “The foundational cost, comprised primarily of land, determines consumer pricing and becomes increasingly complex due to limited availability and altered negotiations with landowners.” Elaborating on joint ventures, joint development agreements, and outright purchases, within the context of the land models. Shashank Paranjape said, “It is advisable for those with ample funds to invest directly in land acquisition and its subsequent development. For those lacking capital, forming a venture with a reliable partner is essential, especially since shifts in tax regu- lations like GST increases have made previous models of up to 45% partnership untenable, prompting many multinational corporations to seek joint ventures where the landowner receives a minor share of the revenue.” J.K. Bhosale added, “Pune should emulate Mumbai's infrastructural advances, made possible by organizations like MMRDA, to enhance its own urban development without neglecting institutional empowerment and effective championing for city improvements.” PUNE GROWTH TRAJECTORY Anuj Dhody shared that the introduction of the new UDCPR has led to enhanced Floor Space Index benefits, offering landowners and developers significant development potential on their properties. Ranjit Naiknavare said, “UDCPR has become a perma- nent fixture in our urban development schema, dictating project parameters through available parking rather than FSI, which is no longer the primary commodity. Our focus has shifted towards project efficiency and client needs, with FSI now a monetized and secondary factor in planning.” Gulzar Malhotra cautious view was from pricing perspective, “The overall sales numbers have come down, and the new inventory added is more than the sale numbers of the previous year, is reason to be a bit cautious. There is a lot of potential inventory waiting in the wings for the UDCPR to be made applicable. This will potentially add to the overall supply.” “Significant commercial real estate growth is ob- served in both eastern and western quadrants, notably with Hinjawadi's large IT parks stemming from a gov- ernment initiative in the late 90s. However, replicating such developments outside Hinjawadi is hindered by land availability challenges,” informed J.K. Bhosale Shashank Paranjape stated, “Residential developers may have the ability to influence their clients' location preferences, whereas commercial real estate agents cannot. Infrastructure is vital, especially for large IT parks which require robust utilities like water and electricity. Unfortunately, these are not readily available in remote areas, and even government efforts to provide them are often insufficient.” Sachin Bhandari added, Specific to Pune, we've observed a remarkable uptick in the luxury segment, which has not seen these levels of sales before. Pune typically has a strong mid-segment and premium segment market, but what sets the current market environment apart is the growing interest in luxury real estate. There's a significant focus on purchasing high-end homes with numerous amenities, marking a shift from previous years.” Sustainability is fundamentally essential,transcending market-oriented perspectives and addressing larger demands for human life. However, addressing broader global economic challenges necessitates greater accountability and the implementation of comprehensive measures beyond individual efforts- Gulzar Malhotra Pune offers robust social amenities despite needing significant infrastructural upgrades, particularly in transportation and education sectors. To sustain its growth trajectory, the city must expand its metro network extensively and enhance the quality of its educational institutions- J.K. Bhosale Pune, often regarded as the "Oxford of the East," derives momentum for industry and trade from its youthful demographic and strong industrial and technological sectors- Anuj Dhodi Pune's real estate thrives due to its favorable climate, strategic proximity to Mumbai, and robust mix of IT, manufacturing, and education. The city's allure as a desirable retirement destination also significantly contributes to the housing sector continual demand growth- Sachin Bhandari In the current real estate climate, both property prices and interest rates are elevated, a situation unlikely to persist. Post-election, it is anticipated that a decline in interest rates, coupled with stabilized property prices, will positively influence the market- Ranjit Naiknavare
Tags : Anuj Dhody CBRE Gulzar Malhotra Gera Development Shashank Paranjape Paranjape Schemes (Construction) Ltd Sachin Bhandari VTP Realty Ranjit Naiknavare Naiknavare Developers