PUNE: Knight Frank India, a premium international property consultant, in their flagship market assessment report “India Real Estate January – June 2021” – which evaluates the performance of residential assets classes in the top eight markets of India – cited that the home sales in Pune witnessed a significant growth of 74% year-on-year (YoY) to 17,474 units in H1 2021 against 10,049 units in H1 2020. This strong performance can be attributed largely to robust sales clocked in Q1 2021 which was whipped by the lower stamp duty window and a low base of Q2 2020. New launches in Pune also grew by 52% to 20,477 units in H1 2021 from 13,435 units in H1 2020. The healthy increase in launches is mainly due to the lower base effect and less stringent lockdown during the second wave of Covid-19. The Government permitted construction activity, followed by guidelines that aided launched to grow.
PUNE MARKET SUMMARY
The residential sales in Pune started to show a resurgence in home sales and launches, especially during Q3 2020 and Q4 2020 after the reduction of stamp duty rates; this momentum was also carried intoQ1 2021. However, as the second wave of the pandemic began unfolding, the momentum dropped, with Q2 2021 registering a sequential drop of 72% in volume of home sales and 87% in new home launches.
With reference to the performance of micro-markets, markets in the West (which includes Aundh, Baner, Wakad, Hinjewadi, Bavdhan, Pashan) and East (which includes Viman Nagar, Kharadi, Wagholi, Hadapsar, Dhanori) continued to dominate sales in Pune. In H1 2021, markets in the West had the highest- 39% share of new sales followed by the East at 23%. Proximity to office hubs is the reason why these markets are witnessing greater traction. The homebuyers are cognizant of the fact that they will be required to go to the office at least a few days a week once things return to normal and are showing a preference for locations close to employment hubs.
In terms of the price value-based residential asset segments, the share of sales is greater than INR 5 million (>INR 5 mn) the segment grew from 44% in H1 2020 to 49% in H1 2021. Several homebuyers took advantage of the lower stamp duty window. The price ticket segment above INR 10 mn records its share move up to 9% in H1 2021 from 6% in H1 2020.
PUNE TICKET SIZE SPLIT COMPARISON OF SALES DURING H1 2020 AND H1 2021
Launches in H1 2021 grew by 52% YoY. As the second wave of infection hit the economy, developers were better prepared and avoided another labor exodus by providing them shelter, food, and other monetary/non-monetary assurances. When considering micro-markets in Pune, H1 2021 saw the markets in the West and East dominated new launches.
Paramvir Singh Paul, Branch Director – Pune, Knight Frank India said, “The sales in the latest half-yearly period was driven largely by the stamp duty concessions in Q1 2021, reduction in home loan rates to an all-time low, demand for larger homes, better job prospects in the IT sector, increased savings, economic revival after the first wave and price cuts/discounts offered by developers. Despite the closure of the stamp duty window and the second lockdown, homebuyers were active in the market in Q2 2021, and as several developers were willing to absorb the burden of increased stamp duty rates this led to closures of transactions. It is interesting to note that despite the second wave being severe compared to the first wave and even without the stamp duty concessions, many homebuyers have purchased their homes which are very encouraging signs for the sector.”
With reference to the home price, Pune witnessed a decline of 1.5% YoY in H1 2021. However, developers continue to offer discounts such as GST waivers, deferred payment plans, absorption of the stamp duty burden, no floor rise, gifts, etc to lure the homebuyers.
QUARTERLY LAUNCHES AND SALES TREND
MICROMARKETS AT A GLANCE
Residential price movement in select locations:
Micro-market classification – H1 2020 Vs H1 2021:
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