Pune real estate sees prices drop for the first time

Pune real estate sees prices drop for the first time

The number of new launches in Mumbai Metropolitan Region (MMR) has seen an 83 percent fall from its peak of 1.38 lakh flats in 2010 to a mere 23,253 flats in 2017.

While in office and commercial sector, new completions are at a decadent low at 71 per cent for developers are diverting resources towards completing residential projects. However, the July-December sales figures of these cities in 2017 were still significantly lower than the second half of 2014 and 2015, clearly depicting an underlying declining trend, the report said. However, affordability, that is house price to income ratio has grown better in Chennai as the affordability is nearing 4.5 from 5.5, which is a good sign for the industry, Kanchana Krishnan, Chennai Director, Knight Frank, said.

Despite the price cut, dearth of meaningful demand has continued to hold back sales even though rising inventory, a major overhang in the last three years, has significantly declined. But from the sales peak of 2011 when 3,68,568 units were sold, this is a step decline of 62 per cent in 2017 at 2,28,072 units. He said the base price has dropped by 5%, which, combined with other offers, discounts and freebies, "translates into an effective price benefit of 11% to 12% for buyers".

Das said that price correction downwards would be more pronounced in the coming months.


"Supply grew 13 per cent to 12.5 million sqft compared to 11.1 million sqft in 2016, and the report blamed the headwinds in the technology sector and supply crunch for this subdued growth". "This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes".

Das said that "in terms of sales, the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period a year ago, however overall sales volumes reflect a declining pattern". Pune took the biggest hit (7%) and Hyderabad posted the highest increase (3%) in prices.

If you have any home purchasing plans, you'd best hurry though since the report mentions that many developers are reporting a progressive increase in enquiries during the fourth quarter of the year.

Meanwhile, Chennai city's office space market also plummeted as the share of largest office space consumer, IT and ITeS sectors, halved from 43 percent in second half of 2016 to 25 percent in second half of 2017. "The pace at which developers align themselves to the new regulatory norms and launch new products in the right ticket sizes that appeal to the homebuyer's interests, will determine the trajectory of the market going forward".

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