Speaking at the release of bi-annual Gera Pune Residential Realty Report, Rohit Gera, Managing Director, Gera Developments shares his perspective with Realty+ on the overall trend in the market. Sharing his views on affordable home with Realty+, Rohit Gera stated that instead of affordable housing the demands for more spacious homes ranging in Rs 40 lakhs to 60 lakhs has risen in Pune market. “Due to Covid-19 pandemic homebuyers started looking out for more spacious homes. In affordable housing segment, even after government incentives the consumers are not able to avail the loans so in Pune there is not much demands for the affordable housing," he said. He further stated, “Prices have continued their upward trend increasing by 5% along with increasing sales and new supply. Higher sizes continue to do well highlighting not only the increased demand for bigger homes but also the commensurate increase in affordability.
Affordability continues to increase and is now at 3.56 time’s annual salary. However, going forward we could see oversupply in certain segments create challenges which market forces will eventually correct as we have seen in the past. This risk of oversupply creating a downward pressure on selling prices combined with the massive upward cost pressure on account of material prices will continue & pose challenges for developers.” The last one year has seen a tremendous increase in input costs for real estate projects. Cement is up 27% while steel is up 24%. Other materials too have shown large price increases.
These will create a pressure on profitability for all developers. Over time interest rates as well as prices have shown a downward trend especially since June 2015. On the contrary, incomes have significantly gone up among people in the city, thereby increasing the affordability by a greater degree. In the past one year, especially the second half, the recovery in residential real estate sales has remained significantly better. In fact, taking stock of the recovery post the second wave suggests sales are 117% as compared to the level of December 2020. This clearly suggests a waning impact on real estate sales of the subsequent waves of the pandemic.”