real estate market in pune

The Sensex tanked over 18772  points in the last 70 odd days – though recovered by 2000 points, it’s still 4000 shy of what it was in early Auguest  . The immediate fallout was expected to be the Indian realty sector. While a meltdown, per se, is yet to happen, the danger signs are very much on, with a stagnant market sending investors scurrying for cover in most Indian cities.
The scenario is somewhat different in Pune though, with the builders trying to gloss it over even as the investors have been waiting for this cloud over their portfolio to clear. The potential buyers meanwhile have been waiting for a real estate crash.
The builders swear that’ll never happen in Pune as projects get sold out before they’re announced. A specious argument, say industry watchers as not many units are getting sold these days. Clearly, this finds support from the estate agents, most builders – including the city’s top one dozen – have begun to sit across the table and negotiate with their clients, something that was unheard of till six months ago. And in many cases they’re willing to climb down by as much Rs 500 per sq ft. but talk to some of the builders and they admit such trends have been “heard of” but it’s yet to happen to them. Even as they wish away something that is looming large over their horizon, the investors – primarily those from nearby Mumbai and the ones wearing NRI colors – have already begun to get restless. Meanwhile, the first casualty in what’s shaping to be a bloody war is the new breed of landowner-turned-builder, of which kind there are supposed to be not less than 500 in the city with their projects at various stages of development. “Even if we take a conservative estimate that only 300 of these ‘first flush’ builders will get caught in the market correction, and that only half of their projects will get affected, one is talking about 1,50,00,000 sq. ft. of built space that will soon run into trouble. At a cost price of Rs 1500 crore being hit in the next six months or so,” says a leading estate agent who handles some of the prime projects in Pune.
The danger signs are already flashing with the IT sector, the major growth engine powering the city’s real estate growth slowing down and many of them preferring to turn to newer IT hubs like Nagpur and Kolhapur, given the infrastructure conundrums that Pune faces. Add to the disenchantments of the defence personnel with the city — the one segment that built Pune’s reputation as the pensioners’ paradise —- and the picture is complete.
If the defence personnel are looking at alternative destination such as Mhow and Miraj to settle down these days, it’s not without reason. Because, a spacious three- bedroom apartment that they were able to purchase at Rs 35 lakhs as recently as in 2011  now costs Rs 1 to 1.5 Cr. in Pune.