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A TALE OF TWOCITI IMUMBAI AND PUNE HAVE EMERGED AS THE COUNTRY'S TWO TOP RESIDENTIAL MARKETS

MICHAEL GONSALVES Pune

UMBAI, the financial capital of India and neighbouring Pune region, have emerged as the country's two top residential mar­

kets. In doing so, they have edged out Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata and the National Capital Region (NCR) of Delhi.

According to trend reports and devel­opers in both the cities, residential sales in the first half of this year in Pune have remained stable while good traction in the compact homes category has helped Mumbai come closer to first half sales figures of 2016.

Sector analysts say increased afford-ability and the end-user market have helped Pune's residential market to re­main largely unscathed by demonetisa­tion. According to the latest research re­port by Anarock Property Consultants, residential sales in Pune in the first half of this year (April-September 2017) rose by 4 per cent to 15,320 units, up from 14,800 units sold last year.

Similarly, residential sales in Mumbai merely fell by 6 per cent to 28,250 units, down from just 30,200 units last year.

"Sale of residential units picked up in Maharashtra after Real Estate Regulatory Authority (Rera) set up on May 1 this year," Manju Yagnik, vice chairperson at Mumbai-headquartered Nahar Group, a 44-year-old real estate firm told Financial Chronicle.

Buyer confidence was based on sound background; Rera has made the registration of projects, promoters and

real estate agents mandatory. "In fact, June-July 2017 saw sales of

a whopping 34,000 residential units in the entire state as per the stamp duty registration data," Yagnik points out, adding that this is despite an increment in property taxes in the 10-13 per cent range due to the goods and services tax (GST) regime.

During this period Maharashtra had a residential inventory of t otal of 2.75 lakh units, out of w hich Mumbai ac­counted for 1.5 lakh units, she said.

According to Yagnik, while sales again dropped by 30-35 per cent in August, they were picking up steadily from September. "Developers are now experiencing an uptake in sales, which is likely to be strengthened over the next few months," she predicts. w • b

•hat is selling nicely in Mumbai and Pune are ready-to-move in apartments for which even banks were lending

easy loans. Yagnik points out: "Pune has devel­

oped into a realistic market because of end-users, as people in the IT sector and in educational hubs, were buying homes, even as foreign brands tying up with the Indian builders are much in demand in the city.

As a matter of fact, Pune's residential market seems to have evidenced very little impact of d emonetisation, if the first half of t he 2017 sales figures are anything to go by.

"Although the city's apartment sales had remained steady even in the second half of 2016 when demoneti­sation had affected most other mar­

kets, Pune's sales showed a slight im­provement as they rose by 4 per cent year-on-year basis in the first half of 2017," Anuj Puri, chairman at Anarock Property Consultants told Financial Chronicle.

Affordable and mid-segment housing in the price range of Rs 3,500-Rs 6,000 per sq ft added more than 25,000 units of supply to the Pune residential real es­tate market in second half of 2016 and first half of 2017.

The fringe areas of Pirangut, Bhugaon, Wagholi, Dhanori, Hinjewadi and areas in close proximity to Hinjewadi in Pune saw the maximum demand on the back of lower tick­et sizes, coupled with good connectivity to the city's primary IT hub.

Puri foresees this trend to continue, with several more afford­able and mid-segment projects likely to hit the market in these areas over the next 12-18 months.

Areas like Dhanori, Wakad, Ravet, Undri-Pisoli, Hinjewadi, and Wagholi in Pune are now witnessing significantly in­creased sales enquiries, and will remain among the preferred destinations for middle-class homebuyers in coming years.

Says Puri: "Housing in the price range of Rs 20-Rs 35 lakh bracket has witnessed increased interest from pri­vate developers and has turned out to be a key driver for housing sales in Pune."

The Pune market, in fact, has seen a significant shift in terms of the type of product being launched by developers.

6 C

ohit Gera, managing di­rector at Gera Developments and vice president at Credai Pune Metro told Financial Chronicle: "During the

second half of 2014, the average size of apartment launched was 981 sq ft. The average apartment size launched in the first half of 2017 is now down to 722 sq ft. In addition, the average rate per sq fit of new projects launched has dropped in the last few quarters."

The resultant effect of smaller sized apartments, lower prices, lower interest

rates and increasing salaries have led to a situation where af-

fordability has gone up sub­stantially in Pune, he points out.

"This has led to an increase in sales num­bers over the last year," says Gera.

According to Gera, "The unit sales based on

our research of the Pune Metropolitan Region is

much more at 40,063 homes sold in the primary market in the

first half of 2017 as compared to 47,704 homes sold in the first half of 2016. This is an effective drop of nearly 18 per cent and not an increase of 4 per cent as claimed (by Anarock Property Consultants), Gera said.

"The difference in numbers com­pared to other agencies could be on ac­count of the vast geographical area we cover in our research," he explains.

Gera says the big trend on display is discerning customers buying from re­puted developers with a track record.

"Finally the equation requires the trini­ty of right location, right product and right developer. Projects that meet these criteria are seeing good sales momen­tum even in a market that on an overall basis seems to be facing tremendous headwinds," he says.

According to Anarock Property Consultants, just like the stable residen­tial market of Pune, Mumbai's sales fig­ure too have came close to first half of 2016 thanks to a lot of t raction in the compact homes category.

"The financial capital saw sales mo­mentum pick up further in the ensuing quarters, thanks mainly to the increase in buyer confidence after the rollout of Rera in Maharashtra," Puri points out.

T; 11 I he festive season is expect-led to drive sales further in the second half of 2017, as a sanitised market envi­ronment encourages fence sitters. In addition, buyers

are being enticed by several offers and discounts across locations.

The latent demand in the relatively lower capital value ranges offered in some of Mumbai's suburban locations is being met by the launch of compact home projects in recent months.

Points out Puri: "This supply specifi­cally targets the needs of professionals, singles and unmarried couples as well as upwardly-mobile nuclear families. Developers are realising that this is the new 'sweet spot' of a significant cross-section of Mumbai's population and that it makes good business sense to cater to it."

Parth Mehta, managing director at the Mumbai-based Paradigm Realty, be­lieves there has been an overall increase

in sales in the real estai e sector over the last year, post the demc

"The sales at Anan Borivali in Mumbai h;

netisation, da Residency at d gonaup to 63

units in the festive season last year, whereas this year its sal es grewby 27 per cent to 83 units till August 2017. The

Ananda costs says. he Pune market .ddingito its geo

2BHK apartments ai about Rs 1.5 crore," he

Mehta too says that is always growing and s graphical spread, making it'by far the largest and most vibran t real estate mar­ket in Maharashtra, eve n the country.

"The country's reel estate market has changed tremend )usly. The cities have expanded and new economic driv­ers have come in and created at all levels, director at Mumba^tiased Duville Estates told Financial Chronicle.

Likewise, appropri now being created for £ The government has c eployadiyarious policy initiatives to en ownership becomes af brdable; and de sirable. Property price: nalised after demone are vyitnessing increased sales," Dubash further said

Pune, in particular from stabilised real estat 3 prices and is in­cluded amongst the list by the government for opment under the 'Sma

"Pune continues to ;xperience„rapid residential and

and.has wit-development in both commercial propertie nessed consistent development in var ied infrastructure projects while the de­mand for mid-segmen:• homes fcontin ues to be optimistic," D' ibash points out

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