One year of COVID-19: Pune housing market holds its ground
In cities like Pune, the pandemic has in many ways proven to be a booster for housing demand.
In this article, Akash Pharande, Managing Director - Pharande Spaces discusses how the housing market fared despite COVID-19. He is of the view that the pandemic has in many ways proven to be a booster for housing demand! Read the article to know more about it!
Despite the COVID-19 pandemic's onslaught for more than a year now, the residential market of Pune has remained resilient. Notably, Pune was among the worst-affected cities in not just Maharashtra but in the entire country during both waves. Naturally, this has impacted the city's economy in almost all sectors.
However, Pune's housing market did fairly well even in the last one year. Both demand & new supply have been good and even picked up speed after restrictions were rolled back, following the first wave in 2020.
Pune's housing sales benefitted a lot from the stamp duty cuts (now unfortunately over) and low home loan interest rates. Maharashtra Government’s stamp duty reduction (3 per cent between September and December 2020 while 2 per cent between January and March 2021) was a boon that helped both developers as well as their customers.
Leading banks are still offering home loans below 7 per cent. Also, many of the prominent developers still offer bespoke deals including payment schemes (10:90, 20:80), a complete waiver of stamp duty and registration charges, GST waiver (5 per cent of the property cost minus ITC benefits) along with cashback schemes. These offers continue to make buying homes quite attractive in Pune.
Moreover, buying homes has become a major priority for Puneris - not only for complete family safety in the pandemic but also because housing is still the best investment in a city like Pune.
Pune housing demand & supply
Housing demand remained good in the last one year and Pune's average property prices have remained attractive at around Rs 6,573/sq. ft in 2020 (according to Housing.com) for both first and second-home buyers. Affordability is a big factor in price-conscious Pune, especially during a health crisis like COVID-19.
In terms of new supply, ANAROCK Property Consultants says that roundabout 30,000 units were put on the market between April 2020 and March 2021. Developers confidently added this supply because housing demand in Pune exceeded expectations even in the pandemic. Because of strong competition, Pune's developers maintained focus on the correct unit sizes, quality of their homes, and timely completion of their projects.
According to property consultants, Pune's developers sold approx. 26,800 units in FY 2021. Interestingly, 48 per cent of these sales were in Pimpri-Chinchwad Municipal Corporation (PCMC) areas. In the previous FY 2020, PCMC's share was lower at 45 per cent of about 52,000 homes. The growth of housing demand in PCMC clearly shows that this highly-planned region is getting more and more attention from buyers during the pandemic.
Besides, having all necessities that make life easy such as water & electricity supply, scientific sewage system, abundant green open spaces, and safety, PCMC is also Maharashtra's township capital.
Integrated townships are now all the rage among homebuyers, who want additional safety and convenience after getting burned by COVID-19. Such buyers want to live in fully-equipped gated communities, where all basic requirements, as well as safety and security, are assured.
In cities like Pune, the pandemic has in many ways proven to be a booster for housing demand. We expect property prices to start hardening within 12-18 months, owing to the healthy demand.