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INSITEREPORT2018 Pune

July - September

From CBO’s Desk

National Outlook

Market Indicators

Market Movers

99acres Outlook

Pune

Annexures

03

04

05

06

07

08

10

CBO’s perspective on current market

Snapshot of real estate ambience across top 8 metro cities

Changes in capital rates and inventory status QoQ; and rental values YoY

News that impacted Pune’s realty market in Jul-Sep 2018

99acres’ perspective on current market

Key highlights - Pune’s capital and rental market in Jul-Sep 2018

Contents

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MethodologyThe Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on 99acres.com in Jul-Sep 2018.

Maneesh Upadhyaya Chief Business Officer99acres.com

From CBO’s Desk The Indian real estate sector finally bid adieu to the prolonged impasse which started with demonetisation and worsened with RERA and GST ambiguities. Recovering property enquires, sales volume and prices were testimony to a progressive market sentiment. Barring Chennai and Pune, where average weighted property prices remained unchanged this quarter, all other metro cities witnessed the capital rates increasing marginally versus the previous quarter. Hyderabad remained at the forefront with a two percent rise in ‘ask’ rates.

While unsold inventory trimmed in both new projects and resale markets, project launches in affordable housing segment gained momentum. Multiple efforts towards strengthening infrastructure, a pro-buyer regulatory environment in the

country and unchanged interest rates are expected to push the housing sector on a growth trajectory with

improvement in fresh supply and sales volume in the ensuing quarters.

3INSITE : PUNE

NATIONAL OUTLOOK NATIONAL OUTLOOK HOME BUYING SENTIMENT Buyer sentiment remained upbeat in all metros barring Kolkata where the ambiguous regulatory environment restricted sales. While Hyderabad witnessed increased property enquiries in the pre-election period, Delhi NCR, Mumbai and Bangalore merrily marched towards the festive quarter in hope of a realty revival with property sales improving this quarter.

RENTAL LANDSCAPE

SUPPLY Cities continued to swarm with unsold inventory, albeit lower than the previous quarters but sufficient to restrict capital growth. Hyderabad had the lowest unsold stock, whereas Delhi NCR and Mumbai led the pack with 1.5 lakh and 80,000 units lying unsold, respectively. The controlled pace of new launches and slow-paced RERA registrations curtailed the saleable primary inventory.

PROPERTY PRICES

The seven-quarter growth spree of the rental market continued in the eighth quarter with all metros reporting a spike in the average rentals by 3-5 percent. Mumbai, Bangalore, Pune and Hyderabad emerged as the frontrunners in the rental market. With a slow-paced revival in the capital market, rental growth is anticipated to continue in the forthcoming quarters.

Except Chennai and Pune where prices remained unchanged, average capital ‘asks’ remained buoyant across metros in Jul-Sep 2018. Capital values in the premium segment remained under check due to a cumulative inventory overhang of over four lakh units. Hyderabad led all metros with two percent growth in prices, QoQ, owing to the recently launched RERA website.

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BangaloreDelhi NCRMumbaiChennaiPuneHyderabadKolkataAhmedabad

MARKET INDICATORS

* Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com

Capital Values Rental Values Supply

˄ ˄ ˅ ˄ ˄ ˅ ˄ ˄ ˄ ˄ ˅ ˄ ˅ ˄ ˄ ˄ ˄ ˄ ˅ ˄ ˄ ˄

IN FOCUSGST ANNIVERSARY

PROPERTY PRICESAmbiguities regarding Input Tax Credit and its mode of payment kept the buyers wary of investing in under-construction properties. Despite causing a shift in buyer preference towards ready homes, GST did not trigger a downward price correction. Exclusion of Stamp Duty and Registration charges from GST increased the total cost of owning a house by 3-4 percent.

The slash in the GST slab from 12 to eight percent firmed buyer’s confidence and demand for the country’s flagship program – Pradhan Mantri Awaz Yojana (PMAY). Although a significant impact on property sales has not been noted, the rate cut has helped improve buyer sentiment. The move is expected to propel transactions in the affordable housing segment in the longer run.

AFFORDABLE HOUSING

The extension in the monthly limit of maintenance charges to Rs 7,000 for levying 18 percent GST, and on the annual threshold limit from Rs 10 lakh to Rs 20 lakh for the applicability of GST on rent attracted from a commercial property or from a residential property used for commercial purposes, eased the tax liability on property owners.

RENTAL MARKET

June 1, 2018 marked the first anniversary of the replacement of the archaic tax policy with the unified tax system - Goods and Services Tax (GST) in India. The realty sector, which landed in the 12 percent tax bracket, was freed of multiple taxes such as VAT, Service Tax and Central Excise. Input Tax Credit (ITC) and the anti-profiteering clause were the two most benefitting features of the new tax system.

5INSITE : PUNE

Market MoversPune tops the list of most livable cities in India Pune was reported to be the most liveable city in the country by the Ministry of Housing and Urban Affairs. A total 111 cities were surveyed based on four different metrics - governance, physical, social and economic infrastructure. The announcement is likely to have a positive bearing on the city’s real estate sentiment.

Infrastructure development on the radar Pune is set to experience an infrastructure facelift with key projects in the pipeline such as Hinjewadi-Shivajinagar metro, Swargate-Katraj metro, Bus Rapid Transit System (BRTS) along the Pune-Mumbai Highway, revamp of smaller roads, and a 33 km-long ring road.

Govt fast-tracks Pune Metro The State government categorised the third phase of Pune metro running between Hinjewadi and Shivajinagar as a ‘vital project’. The status would mean faster release of land, finance and other requisite assistances, fast-tracking the completion of the project. The decision to extend this line up to Hadapsar, too, spelled good news for homebuyers.

PMC approves development of IT parks Pune Municipal Corporation’s (PMC) approval to create new IT Parks in Aundh, Baner, Balewadi and Kharadi would generate approximately one lakh sq ft of IT space in the city. Increased job opportunities are expected to propel housing demand in nearby housing locales such as Wakad, Pashan and Vishrantwadi.

NRIs eye Pune housing market for investment As rupee slided against the US Dollar, Pune, Delhi and Mumbai, emerged as the NRI community’s top choices for earning healthy return on realty investments in the long run. NRIs are anticipated to crack deals worth Rs 100-150 cr as consortium, benefitting the residential, retail as well as commercial real estate markets.

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The Jul-Sep 2018 quarter was marked by a resurgence in unit launches, and an increase in the affordable residential stock in Pune. Out of the 3,000 odd units which were added to the market this quarter, only 10 percent belonged to the luxury segment. With limited scope for revising property ‘asks’, average prices maintained status quo across fresh bookings and the resale segment. The rental landscape, however, gained steam due to robust demand, resulting in an annual uptick in prices by four percent. Infrastructure enhancements, commercial developments and faster project completions also helped the market report a happier tale than before.

Property sales remained buoyant through the quarter. The 10-day festive period of Ganesh Chaturthi, too, failed to record a colossal hike in sales volume, leaving the developer community disappointed.

On the supply side, Category A developers took the lead in new project launches. The attempts towards space optimisation significantly spiked the average project sizes to about 220 units per project. Liquidity crunch and increased cash outflows towards completing existing projects hit new supplies by Category B and C developers. In a bid to escape penalties under RERA, majority new projects came with prolonged completion timelines. The average time for completing residential projects has gone up by 2-3 years.

The market is expected to benefit from the increased conversions in affordable and mid-income segments. NRI interest in the city is also anticipated to benefit the luxury segment in the ensuing quarters.

99ACRES OUTLOOK

Wakad 5,300 - 6,300 0% -1%

Kharadi 5,600 - 6800 1% 5%

Baner 6,400 - 7,500 1% 2%

Hadapsar 4,900 - 6,500 -3% 1%

Hinjewadi 4,800 - 5,800 2% 0%

Wagholi 3,800 - 4,600 -1% 0%

Pimple Saudagar 6,000 - 7,100 1% 1%

Kothrud 8,000 - 9,400 -2% -1%

Bavdhan 5,600 - 6,800 -1% 2%

Mundhwa 5,100 - 6100 3% 6%

LOCALITY AVERAGE ‘ASK’ RATE (PER SQ FT)

* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter

Price Movement in Key Micro-marketsPrice Movement in Key Micro-markets

QOQ CHANGE YOY CHANGE

7INSITE : PUNE

PUNEIn the backdrop of improved enquiries and residential demand, Pune’s realty market witnessed stability in Jul-Sep 2018. Approximately, 33,000 property registrations were reported in the quarter, in both primary and secondary markets. Majority of the conversions hailed from the fence-sitters who waited long for the market to gain strength.

KEY HIGHLIGHTS

Pune’s housing segment marked steady growth in Q2 2018. Close to 70 percent of the tracked housing localities recorded positive movement in the average capital prices.

Indisputably, affordable housing continued to nudge city’s realty growth. However, the mid-income units ruled the roost in the quarter with housing belts in the East and West bagging the maximum demand.

Karve Nagar in the East topped the popularity charts recording a four percent growth in its average capital prices, QoQ. One of the developed localities, replete with social and physical infrastructure and offering promising Returns on Investment (ROI), the area remained extremely popular amidst locals. Backed by similar factors, Kalewadi also registered a three percent appreciation in its average capital values.

Following suit, Wanwadi, Charholi and Mahalunge also garnered homebuyers’ attention, each recording a three percent hike in the average capital ‘asks’, QoQ. While Wanwadi being a famous cosmopolitan, sustained homebuyer’s interest, Charholi’s popularity can be attributed to the influx of reputed developers and the emergence of quality projects

2%1% 1% 1%

0%-1%

6%

6%

1%

8%

-5%

9%

7%

-3%-4%

9%

3%

-1%

7%

5%

Hin

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adi

Bane

r

Khar

adi

Und

ri

Kond

hwa

Wak

ad

Wag

holi

Bavd

han

Had

apsa

r

Bale

wad

i

* %change represents quarterly capital movement and yearly rental movement

Capital Rental

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in the last six months. Unlike earlier, increased availability of the state-of-the-art projects, encapsulating latest amenities and conveniences has triggered the per sq ft rate in the area.

Rental market continued to show resilience in the micro-markets near the IT hubs. Localities such as Tingre Nagar, Shastri Nagar, Hadapsar, Sasane Nagar, and Lullanagar remained the key standouts, each recording a nine percent growth in its average rental prices, YoY.

While proximity to the posh locale Viman Nagar led the landlord community to quote higher lease values in Tingre Nagar and Shastri Nagar, Hadapsar and Sasane Nagar benefitted on the back of the extension of the Hinjewadi-Shivajinagar metro link to Hadapsar and nearness to Magarpatta IT Park.

Lullanagar, a sub-locality of Wanwadi and one of the biggest trading centers in the city, remained a favourable rental destination for locals, who moved out of their small ancestral properties based in Lullanagar but preferred an accommodation within the area to stay close to work and ancestral property. The trend has put an upward pressure on the annual rental values in Lullanagar.

Hin

jew

adi

Bane

r

Khar

adi

Und

ri

Kond

hwa

Wak

ad

Wag

holi

Bavd

han

Had

apsa

r

Bale

wad

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* Graph depicts the fluctuation in supply wrt demand for residential properties in various budget categories* %change represents quarterly capital movement and yearly rental movement

83%

89%

/ 1

1%

87%

/ 1

3%

88%

/ 1

2%

87%

/ 1

3%

83%

87%

89%

SUPPLY OF APARTMENTS

DEMANDUC UCRTM RTM SUPPLY

* Graph depicts the availability of residential apartments

wrt other property types, QoQ, along with the distribution

of under-construction and ready stock

Jul-Sep 2018 Apr-Jun 2018

49%

50%

50%

28% 32

%

29%

32%

14%

6% 5% 5%24%

10%

10%

3%31%

23%

9% 10%

3%28%

9% 10%

3%

28%

22%

28%

21%

Within Rs 40 Lakh

Jul-Sep 2018

Apr-Jun 2018

Jul-Sep 2017

Rs 40-60 Lakh

Jul-Sep 2018

Apr-Jun 2018

Jul-Sep 2017

Rs 60 Lakh - Rs 1 Crore

Jul-Sep 2018

Apr-Jun 2018

Jul-Sep 2017

Rs 1-2 Crore

Jul-Sep 2018

Apr-Jun 2018

Jul-Sep 2017

Rs 2 Crore and Above

Jul-Sep 2018

Apr-Jun 2018

Jul-Sep 2017

BUDGET-WISE SUPPLY OF PROPERTIES

DEMAND SUPPLY

13%

15%

-25%

-5%

-6%

-7%

-19%

-22% 22

%

20% 23

%

5% 3%

4%

3% 2% 2%

9INSITE : PUNE

AnnexuresCAPITAL VALUES

RENTAL VALUES

Locality Jul-Sep 2018 Locality Jul-Sep 2018 Locality Jul-Sep 2018

Aundh 9425

Balewadi 6600

Baner 7475

Bavdhan 6800

Bhugaon 5100

Bibwewadi 7883

Boat Club Road 14450

Camp 8700

Charholi 5300

Chakan 3450

Dhanori 5500

Dighi 5025

Erandwane 11825

FatimaNagar 6700

Hadapsar 6200

Handewadi 4800

Hinjewadi 5750

Kalewadi 6000

KalyaniNagar 9200

KarveNagar 8900

Katraj 5700

KeshavNagar 6000

Kharadi 6800

Kondhwa 5650

Koregaon Park 11650

Kothrud 9325

Lohegaon 5150

Magarpatta 7800

Manjri 5200

Mohamadwadi 6000

Moshi 4700

Mundhwa 6100

Narhe 4800

Nigdi 6100

Pashan 7150

Pimple Gurav 6150

PimpleNilakh 7400

Pimple Saudagar 7075

Pirangut 4000

Pisoli 4450

Prabhat Road 15500

Ravet 5550

SenapatiBapatRoad 13000

Sopan Baug 9900

Talegaon 4050

TingreNagar 5700

Undri 5025

VeerbhadraNagar 7500

VimanNagar 7900

Vishrantwadi 6350

Wadgaon Sheri 6850

Wagholi 4600

Wakad 6275

Wanowrie 7700

Wanwadi 8000

Warje 6733

Yerwada 7725

Aundh 21

Balewadi 18

Baner 18

Bavdhan 15

Bibwewadi 16

Boat Club Road 29

Chakan 10

Erandwane 23

Hadapsar 18

Hinjewadi 15

Kalewadi 16

KalyaniNagar 25

KarveNagar 20

Katraj 15

KeshavNagar 16

Kharadi 19

Kondhwa 14

Koregaon Park 27

Kothrud 21

Lullanagar 18

Magarpatta 22

Moshi 12

Mundhwa 17

Narhe 12

Pashan 17

Pimple Gurav 17

PimpleNilakh 18

Pimple Saudagar 18

Pirangut 10

Pisoli 11

Prabhat Road 28

Ravet 14

Sadashiv Peth 22

SenapatiBapatRoad 25

ShastriNagar 24

ShivajiNagar 25

Sopan Baug 22

TingreNagar 18

Undri 12

VeerbhadraNagar 17

VimanNagar 24

Vishrantwadi 19

Wadgaon Sheri 18

Wagholi 11

Wakad 17

Warje 16

*All prices are per sq ft rates *Capital change depicts quarterly alterations in average ‘asks’ *Rental change depicts yearly alterations in average ‘asks’

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11INSITE : PUNE