Pune developers are more organised and professional in understanding the pent-up demand in the market before launching a new project.
When the organised real estate was in its infancy, developers from across the country were flocking to research agencies and independent property consultants for market feasibility study before launching a new project. The market boom, however, changed the demand and supply dynamics and the developer's gut feeling overtook all rational cost and benefit analyses.
Such high was the demand and absorption then that there was practically no need to define the demand in any of the eight top cities of India. However, the market slowdown taught everyone a lesson that it takes a lot to get a housing project absorbed than just the catchment area having economic activity.
Such high was the demand and absorption then that there was practically no need to define the demand in any of the eight top cities of India. However, the market slowdown taught everyone a lesson that it takes a lot to get a housing project absorbed than just the catchment area having economic activity.
What, then, makes Pune a market that has been witness to one of the best absorption rates in the country even today? Has it defined the demand in a scientific manner? Are Pune developers still going for market feasibility study to understand their core market?
A closer look at the Pune property market indicates the developers are more organised and professional in understanding the Pent-Up Demand in the market before launching a new project. Hence, the supply has never been ahead of or late than the demand. As a matter of fact, they are even open to change the plans if the study of the market suggests so.
A closer look at the Pune property market indicates the developers are more organised and professional in understanding the Pent-Up Demand in the market before launching a new project. Hence, the supply has never been ahead of or late than the demand. As a matter of fact, they are even open to change the plans if the study of the market suggests so.
In March this year, one of the developers in the city scrapped his project to come out with a new plan and layout. It made many of the critics reach the conclusion that the developer had been confused with his initial project. However, the developer's action was based on the recommendation of a research agency that did on-ground feasibility study in the wake of slowdown. He was hence backed with a research that indicated the slowdown has led to change in the consumption pattern of the given market. The developer then decided to restructure his project so that it could be absorbed in the market, instead of adding up to the inventory.
Requesting not to be quoted, the developer says, "What is the point of creating an inventory of premium housing when the current market demand in the catchment area is for affordable housing? Yes, the research came as a shock to me since I could not read the pulse of the market. However, I immediately offered my existing buyers to either switch to the new project or get the refund with interest rate applicable. Most of the buyers understood the method in this madness and switched for bigger apartments with the same payment."
Requesting not to be quoted, the developer says, "What is the point of creating an inventory of premium housing when the current market demand in the catchment area is for affordable housing? Yes, the research came as a shock to me since I could not read the pulse of the market. However, I immediately offered my existing buyers to either switch to the new project or get the refund with interest rate applicable. Most of the buyers understood the method in this madness and switched for bigger apartments with the same payment."
This raises a fundamental question as to whether there could ever be a housing bubble in the city property market when the demand and supply cycle is by and large backed by research. After all, it is not the developer,s gut feeling but the ground realities that is defining demand in the city. Will Pune continue to be a leading city in terms of absorption of housing units?
Arvind Jain, managing di rector, Pride Group, maintains that in Pune there is no danger of formation of any bubble that could eventually burst. Sufficient demand for all types of housing drives Pune's real estate market. According to him, cities like Mumbai and Gurgaon are legendary for getting over-heated. Pune, on the other hand, has been experiencing a healthy growth and not speculator driven price inflation. Thanks to better land availability and the fact that the city is still expanding, Pune's property market is kept rational by a constant influx of supply in its new real estate destinations.
"Pune was also one of the first cities to deliver convincingly on the real estate format of the future namely townships. Many of these townships are located close to Pune's thriving Information Technology hubs, which spawn y hubs, which spawn the greatest demand for such offerings. While Pune's first integrated township Magarpatta City cre ated its own ITITeS hub, many others are located close to the Hinjewadi IT Park. In other words, Pune's developers have not only ensured that they do not create an oversupply, but have also concentrated on delivering the right kind of supply," says Jain.
Arvind Jain, managing di rector, Pride Group, maintains that in Pune there is no danger of formation of any bubble that could eventually burst. Sufficient demand for all types of housing drives Pune's real estate market. According to him, cities like Mumbai and Gurgaon are legendary for getting over-heated. Pune, on the other hand, has been experiencing a healthy growth and not speculator driven price inflation. Thanks to better land availability and the fact that the city is still expanding, Pune's property market is kept rational by a constant influx of supply in its new real estate destinations.
"Pune was also one of the first cities to deliver convincingly on the real estate format of the future namely townships. Many of these townships are located close to Pune's thriving Information Technology hubs, which spawn y hubs, which spawn the greatest demand for such offerings. While Pune's first integrated township Magarpatta City cre ated its own ITITeS hub, many others are located close to the Hinjewadi IT Park. In other words, Pune's developers have not only ensured that they do not create an oversupply, but have also concentrated on delivering the right kind of supply," says Jain.
Manju Yagnik, vice chairperson, The Nahar Group, agrees that the Pune real estate market is healthy and growing, attracting people from across the country. With large open spaces, there is huge scope for further development. Owing to the presence of large scale industries from the auto and manufacturing sector, a young talented workforce is in need of housing and therefore there is a huge demand for housing across all segments of property.
Source - TOI
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