Reasons Real Estate in Pune Is Poised for Growth

With market sentiment improving real estate in Pune also seems likely to be caught in the upswing. Stable prices and the festive season of Gudi Padwa make for the right mix for brisk real estate sales in Pune. After a few tumultuous years, real estate in Pune seems to have settled down. Builders in Pune along with brokers in the city in the near future expect a larger number of inquiries to translate into sales.

Real Estate in Pune Last Year

New launches in Pune rose last year by 14 percent. The ticket price of affordable housing in Pune rose moderately last year. Last year the price of mid-level housing also went higher. Market Pundits agree that the reason why units in these price segments rose in cost was because Pune’s real estate market was more resilient to market conditions than were other realty markets.

properties in pune

New launches of luxury flats in Pune fell by nearly 88 percent and the price of such units almost halved.

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The Years That Passed

Over the past few years, Pune acquired a large volume of unsold inventory and these led to the build-up of excess inventory with builders. Demonetization further added to difficulties in the cities realty market. After the successful remonetization of bank notes and reforms such as RERA, Benami Transactions Bill, and GST, real estate in Pune say brokers seems poised to rise.

Gudi Padwa Is Auspicious

The Maharashtrian new year is considered an especially auspicious time to purchase property in Pune. Since the real estate market is heavily driven by sentiment, builders in Pune and builders across Maharashtra expect bountiful sales over a short period of time. Many new launches by builders and developers in Maharashtra are also expected due to Gudi Padwa.

All the Pieces Are in the Right Place

Residential real estate in Pune is still widely considered a buyers’ market. Builders and developers in Pune have taken pains to construct property that is within the budget of buyers, hence today real estate in Pune is among the most affordable in India.

Builders Have Done a Rethink

Prices of new launches have fallen by nearly 14 percent across the top 8 cities in India since many developers across the country have rethought their strategy of how to best sell units rapidly and at a profit. Builders and developers in Pune have altered their strategy and fewer projects are being launched while builders sell existing inventory at lower price points.

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Real Estate Sites Ranks 4 Indian Cities Among Most Unliveable in the World

According to one of the top real estate sites in the world, Bangalore, Chennai, New Delhi, and Mumbai are ranked among the most unlivable cities in the world. All four cities are also ranked as being among the ten cheapest cities in the world to live in, although according to the rankings, the cheapest city in which to live in the world is in Kazakhstan.

Ranking Doesn’t Matter

The rankings by such real estate sites may not make much difference in the lives of those who live in the cities that have been ranked. For citizens of Mumbai, being ranked among the top ten or the bottom ten doesn’t make much difference in the day to day life of someone who lives in Mumbai. For example, if Mumbai were ranked higher it would not automatically change the living conditions of the residents of Mumbai. The city of Mumbai would remain the same regardless of where it is ranked. The same of course is true for all Indian cities that were ranked by this property website.

real estate in india

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Does Ranking First Matter?

This real estate website has ranked Singapore as the most expensive in the world. While the property website does not explicitly state so, Singapore is also among the most liveable in the world. However even being ranked among the most expensive or liveable in the world does not make much difference in the lives of those who live in Singapore. The ranking of cities is not the cause of the ranking, rather the cause of the ranking is the quality of life the citizens of the city enjoy.

Living in Indian Cities

Sociologists who have carried out detailed studies all across the world have found that the poorest and least well off are among the happiest in the world. The slums of Kolkata house some of the happiest people on the planet according to a study by a respected western sociologist. At the same time, many who own some of the best real estate in India suffer from chronic depression. The causality between happiness and wealth is not linear, more money does not automatically make someone happier. Globally, it has been found that annual earnings beyond eighteen lakh rupees do little to increase happiness in people. It should therefore not come as a surprise that poor Indian’s are among the happiest people in the world while extremely wealthy Scandinavians commit record number of suicides during the festive season.

 

Despite the Hype, Don’t Invest in Property in India Yet

Reports are emerging that this is the perfect time to buy property in India. Many first time homebuyers may become tempted to invest in real estate in India as loans today are cheaper than they have been for many years and also because markets are on an upswing.

real estate website in india

Yet experts still believe that investors should act with prudence. Prices for property in India are falling yet real estate insiders caution that an uptick in demand may take longer than many anticipate. Stock and real estate experts believe that unlike in the past, the stock market and the price of real estate may not move in sync. It’s likely that the stock market will rise to higher valuations while the value of property in India remains the same or falls.

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New Kid in Town and New Rules

Affordable housing is the new kid in town. There are reportedly six crore affordable housing units being built across India. Affordable housing carries a price tag that can be anywhere between 20 to 50 lakhs and it is at these price points that the largest number of new residential properties in India are being launched. Experts also claim that the rules of the game have changed as with the introduction of the finance bill in the latest budget, it may no longer be as benign for households to own more than 1 property in India. This will lead to lower demand for houses.

The Rise in FSI

Experts believe that the government intends to keep the supply of new unit’s high which will, in turn, keep new units affordable. An increase in the FSI means that more units can be built on the same patch of land than could be built by builders earlier. The government is pushing its agenda of providing realestate in India for the masses and may neglect other housing segments.

Stocks in Relation to Real Estate

In the past, many of those who invested in real estate did so after making money in the stock market. Such investors would park their profits earned during a stock market boom into the real estate sector. However, this trend is unlikely to be repeated this time as there has been little wealth creation this year even in the stock market. Hence less capital is expected to flow into real estate leading to lower realty prices for the long term

Additionally, it may not be just a great idea to invest in property in India since real estate devalued nearly 14 percent between 2015 and 2016 while other asset classes appreciated in value.

 

Property in India Earns Low Rental Yields and Is Overvalued

Property in India in some of the country’s biggest cities may actually be more expensive than property in European and North American cities. An academic publication has stated that it is easier to buy a house in London or New York than it is in parts of Mumbai. Another disturbing fact illuminated by this real estate website is that, in Mumbai, an average median income family would have to save money for 30 years to be able to buy a flat that is 970 square feet in area.

property in india

Not Worth the Investment

An anomaly that stands out is that many properties have actually provided lower rental yields for owners than if money had been invested in relatively safe 10-year government bonds.

Thus money earned from Renting out such properties has not kept ahead of bond value movements in India suggesting that the price of many properties is stretched or, simply put, properties are overvalued. Cities such as Tokyo, London, New York, and Seoul provide far better rental yields than the largest Indian cities and hence a price correction in these cities is less likely than it is in Indian cities.

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Is a Correction Coming?

As revealed by this property website, the fact that rentals have not kept pace with yields across asset classes means that many properties in Indian cities are overvalued. Many analysts have stated that a correction may very well be in order in cities such as Mumbai and the NCR. Experts have stated that price appreciation in many Indian cities will gradually slow down and that the value of real estate may actually fall sharply in certain Indian cities.

Investing to Earn Rental Income

Among real estate sites in India, few sites have gone so far as to state that rental yields have not kept up with yields on 10-year bonds. This is a stark fact as it means that buyers who hope to buy a property in India with the intent that they would earn regular rental income on it would gain better income adjusted for inflation if they invested in safe government bonds. Such buyers may feel that any property they buy would be worth much more in a few years than it is today, yet according to this real estate website prices are unlikely to rise much higher and may actually drop significantly in certain regions of the country.

Real Estate Builders in India Reducing Flat Size To Improve Affordability

Ticket size of new residential projects in top eight cities in India has seen a drop in last few years. This is a strategy used by different real estate builders in India to recalibrate their marketing places. To reduce their inventory holding, builders and developers reduced the effective cost of their projects and restricted the number of new launches.

property websites in india

As per the market sentiments, the number of new residential project launch also decreased by 11% in previous year. Even after including the top real estate projects, the total housing units launched during the year were just 113,000. Out of these, 56% housing units were launched in mid segment followed by affordable housing segment with 32%. With nearly 36,300 units, the affordable housing segment witnessed an increase of nearly 22%.

The worst affected segment in residential real estate market is the high-end segment with the new launches halved to just 12,000 units. To tackle the situation, builders offering high-end luxury projects sought to rationalize ticket-sizes. Those check projects on property websites in India can see the difference in sizes of newly launched projects when compared with the old projects.

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Not just the reduced sizes, developers are also coming with discount schemes to boost sale of units in already launched projects. Further, many developers are working on the ticket values; these might come down to make the projects more affordable. Reduced bank loan rates will further help the builders to create some velocity in the sales of residential real estate projects in India.

Owing to slow sales all segments in Delhi-NCR, Mumbai and Bangalore saw a drop in ticket sizes. Even the best property sites in India are finding it difficult to attract new home buyers. With the changes made by the developers in their strategies, these sites might also get some business.

These moves by the builders can also help the government in achieving its target of Housing for All by 2022. The government is further encouraging the developers to participate in their objective by offering them different benefits. Impact of the same can already be seen with the slow uptake of residential projects. However, price and value mismatch created some problems initially the improved strategies seem to create better value for the home buyers in India.

Useful Factors Which Help You Assess the Value of Property in India

Much property in India is sold on the secondary market. Households lucky enough to have their own house, can, if they so choose, sell their property to willing buyers. A fair price for a piece of real estate in India that you wish to sell is not necessarily the same as the price you paid for a property or the additional sum you spent renovating it. In reality, a fair price for your house is simply the value a buyer is willing to pay for your house. Real estate sites in India list properties in numerous localities across the country and by visiting such sites, someone considering selling property can gain a fair idea of how much his or her property, if sold, is likely to fetch.

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Understanding Market Value

To put is simply, the market value of a house is what the house could be sold for under normal market conditions. So for instance, if a property is sold due to unforeseen circumstances such as the death of family member, a sudden need to relocate, or any other emergency which may compel a seller to accept a low price, then such a sale would be regarded to have occurred in the absence of normal market conditions. Realestate in India that is sold under such circumstances is generally disposed of at a price lower than that commanded by the market.

What Impacts Market Value

Numerous factors have an impact on the market value of a property in India. Three such factors are known as

  • Curb Appeal

The curb appeal of a property is the appearance of a property from outside or from the curb.

  • Internal Elements

These include factor such as the size of the property, the quality of construction, the number of rooms and whether the house is furnished or unfurnished. The condition of appliances inside the home also has an impact on the market value of a property in India.

  • Location

The biggest driver behind the price of a property is the location of the concerned home. A house in a well-developed and friendly neighbourhood is likely to command a higher market value than a property in a less developed neighbourhood.

How to Assess Market Value of Your Property?

When faced with the task of selling your property in India, the location of the property and the neighbourhood in which it is located is the starting point for sellers. Another factor such as the price at which other properties nearby were sold during the past three months is another gauge of how valuable a home is. Lastly, comparisons with other properties in the neighbourhood should be made and if your property has more amenities and facilities than such properties, then its market value should be regarded to be higher. Real estate websites are another useful tool to use when calculating the market value of your property since they have listings from numerous sellers across the country.

Property in India Not Yet Punching According to Its Weight

Property in India has far more room to grow if the latest findings from one of the top global real estate services firm are correct. Recent findings have revealed that Indian cities have yet to catch up with cities in the west when it comes to intensity of investment. The latest investment intensity index has found that cities in Asia have a long way to go until they catch up in investment intensity to cities in the developed world.

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What is Investment Intensity

The investment intensity index calculates over a three-year period, how much direct commercial investment has been made in a city and the relation of this capital to the size of the city’s economy. If recent findings are any indicator, then cities in India have a very bright future ahead since the direct commercial investment in Indian cities is far lower than in cities in the west leaving a large scope for growth. Realestate in India has good things ahead since eventually the direct commercial investment into Indian cities will rival that in western cities. Indian cities such as Mumbai, New Delhi, and others will gradually take the form of cities in developed countries, evidence of this is visible in pockets of many Indian cities today. Essentially what the recent report has revealed is that Indian cities have a lot of room to attract capital in the future.

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Hindrances to Attracting Capital

Global real estate
investors are trying to diversify their portfolio and over fifty percent of the new global office pipeline is in emerging countries. When there is greater money invested into office space, the demand for real estate in India is also expected to rise. What is required from the authorities in charge of Indian cities is providing investors with greater transparency and to build robust financial platforms from which to attract global investors. What is creating problems for Indian cities is that they are semi-transparent markets despite being among the world’s fastest growing city economies. Real estate sites in the future can benefit from a larger collection of listings on their websites. Till date Indian cities such as Mumbai, Bangalore, and New Delhi are not attracting direct commercial real estate investment comparable to their size, once such cities have greater transparency, they should attract more investment.  Once greater transparency is found in Indian cities they will begin to punch according to their weight and some of the best real estate in India will benefit from greater investment in India cities.