Real Estate News | Residential Real Estate
Pune Continues to be a Prime City for Residential Investment in India
By Michael Gerrity | August 11, 2011 10:29 AM ET
Much like in Bangalore, the primary catalyst for Pune's residential real estate market is the Information Technology and Information Technology-Enabled Services sectors. The central parts of the city have more or less used up their development potential, and it is now in Pune's secondary and suburban markets where the highest growth potential for residential property lies.
The demand for homes does not come from the IT sector alone. Pune's manufacturing sector, which features a number of international names, also drives residential demand. This fact has always given Pune's residential property market an edge over cities which have less diversified demand.
Residential Prices in Key Locations (Rs/Sq.Ft):
Kalyani Nagar: 6500-8500
Viman Nagar: 5200-6500
Pimple Saudagar: 3500-4500
Because of the increasing demand for homes by IT and industrial employees, most of the residential projects being launched in Pune are concentrated on the north-western and south-eastern side. Encompassed in these regions are areas like Baner, Aundh, Balewadi, Hadapsar, Kharadi and Nagar Road.
Sanjay Bajaj, Managing Director of Jones Lang LaSalle India tell the World property Channel, "Capital values on the Pune residential market appreciated by approximately 4-6% since the beginning of 2011, and are expected to appreciate by another 3-4% by the end of the year. This would apply to all of the above-mentioned locations. Growth of rental values is likely to overtake that of capital values. The reason is that a not insignificant share of demand for homes in Pune comes from migratory IT and manufacturing sector employees."
Bajaj further comments, "Moreover, the steady increase in property prices as well as the relentless rise in home loan interest has had an impact on the market. Outright purchase currently seems less attractive to many of Pune's citizens as well as to those from cities other than Mumbai who seek to settle there permanently. Going in for a residential property in a strategic location with the purpose of renting it out is therefore an excellent investment proposition. The ideal configurations are 1, 2 and 2.5 BHKs, since these are in highest demand at the moment.
Overall, the Pune residential market can look forward to healthier growth in the future. The city's road network, which was increasing being challenged, is being enhanced with the addition of more access roads where they are needed the most. Also, a number of malls are being launched in the eastern and the western parts of Pune, which will further enhance demand for homes there. The quality of projects is also improving - there is an encouraging trend of developers using more efficient architectural designs to be seen."