Pune: The impact of overall economic slowdown is catching up with the Pune real estate scene, too. Though, the real estate market has expanded to 22 per cent in the year 2013 - 2014, the growth is about 10 percent less than the previous year., where it had grown up by 31.9 percent.
Inventories also rose from 200944 unsold units to 245674 by the end of March 2014, acording to the annual report published by GERA Foundation this year.
Commenting on the key findings of the Gera Pune realty report, Rohit Gera, Managing Director of Gera Developments said, "We have studied and evaluated the Pune realty market to realize that on the surface there seems to be a slowdown in the rate of increase of realty prices. However, the quantum of slow down needs to be viewed with total cost of purchase rather than the traditional rate per sq. ft. model that has been used to value property. The loading of the common areas onto the carpet area is in the region of 33% to 35% for the common areas. This has had an impact of 8% - 10% on the carpet area or 5% - 7% on the saleable areas. The increase in the extra costs like club house charges, infrastructure etc. has risen more than the rates themselves, thereby having a positive impact on the overall cost that the consumer pays for the home."
Adding that the rising rates of construction material and labour has been the major reason for increase in costs of house, the report indicates that costs have seen an increase of 2.2 per cent in the first quarter and in the later quarter added by 10 to 14 per cent. The study also revealed that increase in inventories has also continued with unsold inventories at an all-time high – the unsold inventory that was at 39238 units 24 months ago increased by 30.9% to 51363 units 12 months ago and currently stands at 66279 units, an increase of 29% over the past year.
The study was divided according to the budget, value, premium and luxury. "It is the luxury segment (costing more than Rs 7500 per square feet) affecting the most as 61 per cent of the stock remained unsold this year." added Gera.
"Houses of average Rs4500 - 5000 per square feet are being preferred by middle class and upper middle class segment. Currently, we have increased budget homes to cater to the demands of the same," added Shankar Seth Jagtap of Chandrarang Developers.
Highlights of the study
-The half yearly price increase has been at the lowest in years at 2.2%
- Pune realty market has expanded by only 22% in the calendar year June 2013 – 2014 as compared to 31.9% in the corresponding period of June 2012 - 2013
- The average price across the city is pegged at Rs. 4910/- per square foot
- Inventory has reached an all-time high of 66,279 units which translated into 29% increase over the past year