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Published & Updated as on - 2010-03-11

The price-sensitive and well-regulated real estate market of Pune, did not witness the kind of runaway hike in property prices as seen elsewhere in the country. So even after the recent price hikes following the post-slump correction, property prices here are much below the peak prices. And real estate here is on road to rapid revival. By Mohammed Aslam, Head JLLM, Pune.

Pune, today figures among the top 10 cities. A recent FICCI-Ernst & Young survey ranks Pune at number seven after Delhi, Mumbai, Chennai, Bangalore, and Hyderabad. The boom city has been truly resurgent on real estate front, on the strength of its IT/ITes industry. Especially with thepromotion of this region as a ‘Knowledge Corridor’ by the state government, Pune’s IT industry has seen substantial growth. Besides, being a strong industrial, education and hospitality hub, Pune’s real estate is truly propelled by multiple drivers.

Residential sector

Pune has transformed from a sleepy town – a pensioner’s paradise to an active real estate destination catering to housing requirements of the increasing population as well as an investment destination for those looking at second home options. Strong economic generators offering good employment opportunities, coupled with better standard of living attract the former category, while pleasant salubrious climate, good connectivity and reasonable real estate prices attract the latter category of buyers to Pune.

The key residential micro market drivers today are the IT industry and the manufacturing sectors. Quality residential real estate development started in 2002- 03. It was in this property cycle that locations like Koregaon Park, Dhole Patil Road, Shivaji Nagar, Deccan, Model Colony and nearby areas gained in prominence as premium residential locations. The year 2004 to 2007 was a boom time in the property market, with prices reaching newer heights. In this phase of the property cycle, locations like Kalyani Nagar, Viman Nagar, Senapati Bapat Road, Karve Road, Kothrud, Aundh etc. gained prominence.

After witnessing a slump over the last few quarters, Pune residential market is showing signs of revival. The market has been characterized by a positive sentiment, largely due to rise in end user confidence, together with improving economy, favourable borrowing conditions and rationalized capital values. This cumulatively led to reviving the sale volumes, with the city witnessing the launch of various projects in both mid and high segments in the second half of 2009.


Luck In Land!

As real estate buyers hesitate to invest in constructed property, fearing price correction and delay in delivery of projects, investment in land could well be a profitable proposition.

Buy land, they are not making it anymore. So goes the famous saying of Mark Twain. Historically, land investment has been more profitable and less volatile. As the population keeps growing and the demand for land goes up, this precious commodity gets scarcer, leading to price appreciation. Land is a basic necessity for any real estate development. And like gold, land generates emotional attachment. And considering the current demand-supply scenario land as a commodity will remain a precious, much-in-demand asset for years to come.

Why invest in land

Identifying an asset class which gets least affected during the downturn is critical for an investor. And according to Amol Shimpi, National Director, Land Sales of Colliers International, buying agricultural land or land in plotted developments on city outskirts has always provided the solution. “The advantage of investing in land is that holding costs involve just the annual property tax. In many locations across the country, the government’s ready reckoner rates for land parcels are lower than the actual market prices,thereby allowing the investors to structure the transaction in such a way that the stamp duty and registration costs are minimized”.

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