Launch of new residential properties in Pune witnessed 26.3 per cent growth year-on-year during the first half of 2021 despite the sales dropping by nearly a fifth in wake of the COVID-19 pandemic, showing optimism among developers, according to a report by PropTiger.com.
Total new launches in the city during the January-June period of 2021 stood at 12,558 units, 26.3 per cent up over 9,944 units unveiled in the same period of 2020.
On the other hand, sales of residential properties in Pune were down by nearly 20.6 per cent year-on-year (Y-O-Y) in the first half of 2021 at 16,220 units. A total of 20,431 units were sold during January-June period 2020.
In its quarterly report Real Insight (Residential) – April-June 2021, PropTiger, reported that 2,810 units were launched in the second quarter, up 125 per cent from 1,251 units in the year-ago period.
It may be noted here that both the first and second quarter of 2021 saw more launches of residential properties in Pune as compared to corresponding periods of the last year.
Total sales of the city stood at 2,495 units, recording a decline of 49 per cent y-o-y.
Mani Rangarajan, Group COO, Proptiger.com, Housing.com & Makaan.com, said, “Our research and market analysis points towards an upward movement in demand in the real estate sector. Residential properties have become affordable as interest on home loans continues to rule low and prices quite stable over for many years now.
“Even if we keep the affordability factor aside, there is a growing urge among potential homebuyers to own a property as work-from-home culture is going to stay in the near future and COVID led to the importance of home ownership. All these factors and the fast recovery in the economic activities are aiding the growth of the residential segment,” Rangarajan added.
The residential market of Pune had been one of the best-performing markets in the first three months of 2021.
However, like the adjoining Mumbai, here also the pace of recovery was hit by the second wave in the following quarter. Demand in Pune took the worst hit amongst the top-eight cities in the second quarter of 2021.
With the launch of 2810 units, the city has registered 125 per cent growth in new launches in Q22021 on a yearly basis. However, supply dipped 71 per cent as compared to the preceding quarter.
Out of the total supply, most of the units launched were priced in the Rs 45–75 lakh price bracket, accounting for nearly 62 per cent of the total pie, followed by projects priced below Rs 45 lakh with a share of 25 per cent.
The majority of the new supply in this quarter was concentrated in the peripheral localities of Mahalunge, Ravet, Dhayari and Yewalewadi. These micro-markets together accounted for 68 per cent of the total new launches.
In terms of configuration, 72 per cent of the units launched were of 2 BHK configuration, followed by 3 BHK, which had a share of nearly 19 percent. The developers focus on larger configurations comes on the back of shifting buyer preference as many organisations continue to work from home under the current scenario.
During the quarter, the top-eight cities witnessed new supply to the tune of 21,840 units, a 74 per cent rise from the completely washed-out April–June 2020. However, as compared to the preceding quarter, the new supply declined by 59 per cent.
On a half-yearly comparison, new launches in the top-eight cities increased significantly by 55 percent in the first half of 2021 as compared to the same period in 2020. Total number of new units launched during the first six months of 2021 stood at 74,876 units.
The total sales of the city stood at 2,495 units, a decline of 49 percent compared to the same period of the previous year. It was the highest decline recorded in the quarter among the top cities. On a quarterly basis, the decline was 82 per cent over the January-March period.
Still, Pune recorded the third-highest sales volume among the major cities, led by Mumbai and Delhi-NCR. Like Mumbai, remission of stamp duty cuts, increasing infections, and lockdown had a significant bearing on-demand in Pune
Nearly 53 per cent of the total sales were recorded in the projects priced below 45 lakh, followed by units in the price bracket of Rs 45–75 lakh with a share of 35 per cent. Only 12 percent of the sales were concentrated in more than Rs 75 lakh price bracket.
Peripheral localities of Ravet and Tathawade in the PCMC region and the IT hub of Hinjewadi in Pune South were the key micro markets that witnessed maximum demand during the April-June 2021 quarter.
Ravet and Tathawade recorded maximum sales in the price bracket of Rs 45–75 lakh, whereas the majority traction in Hinjewadi was in the less than Rs 45 lakh price bracket.
The 2BHK configuration was the most preferred amongst buyers, with nearly 58 percent share, followed by 1 BHK with 28 percent share.
The second quarter of 2021 saw primary residential sales in the top eight cities to the tune of 15,968 units only, registering a decline of 16 percent from the bottom-out second quarter of 2020 and a whopping 76 per cent decline from the preceding quarter of 2021.
On a half-yearly comparison, residential sales registered a contraction of 7 per cent over the same period last year, with nearly 82,144 units sold in H1 2021 as against the 88,593 units in H1 of 2020.
The unsold inventory in Pune stood at 1,28,206 in June 2021 after registering a 5 per cent YoY decline. Pune holds the second-highest unsold inventory after Mumbai. Nearly 60 percent of this stock falls in the less than INR 45 lakh price bracket. Also, out of the total unsold stock, 20 per cent falls under the RTMI category.
In the aftermath of the pandemic, slow sales velocity has increased the inventory overhang in Pune to 44 months at the end of June 2021, from 30 months in June 2020.
The unsold inventory, across the top-eight cities, was marginally reduced by 4 per cent Y-o-Y during the second quarter of 2021.
As of June 30, 2021, the unsold inventory stood at 7.11 lakh units as compared to 7.38 lakh units in June 2020. Among the top cities, Mumbai and Pune together held the highest share of the all-India unsold stock (54 per cent), followed by Delhi NCR (15 percent) and Bengaluru (10 per cent).
Going by indications, we expect the Pune market to bounce back in the second half of the calendar year. Historically, the second half of a year has been good for the real estate market.
Even during the pandemic hit 2020, the markets were up in H2 2020. Thanks to stamp duty reductions from September 2020 till March 2021 by state governments and favourable policy support from the central government.
India was hit badly by the second wave of the COVID pandemic, the impact was reflected in the sales across India. Now, with the pandemic seemingly ebbing and vaccination picking up, the sentiments have improved significantly and will be reflected in the sales number as we move on.
Thankfully, the low-interest regime continued as the Reserve Bank of India did not tinker with policy rates and assured the markets of continued accommodative monetary stance.
“There has been a pick-up in the demand as the second COVID wave subsided. Market reports and analysis suggest the coming months are going to be good for the real estate sector, provided we maintain at least the current pace of vaccination and India is saved from any other wave of the COVID pandemic,” added Rangarajan
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