By Arvind Jain
As little as ten years ago, nobody took Pune’s real estate market seriously. Today, it figures prominently in almost every real estate report as one of the markets which deliver the best returns on investment. While mid-income housing doubtlessly drives the highest demand in the city, Pune’s luxury homes segment has also emerged in force.
Today, Pune holds a very prominent place on India’s luxury housing map, and now compares very favourably even with larger markets like Mumbai, Bangalore and Delhi. In fact, Pune’s luxury housing segment is now gaining an increasingly bigger share of attention from investors and end users alike.
There are several factors driving the demand for luxury housing in Pune. In the first place, luxury homes in Pune are more cost-effective than in Mumbai. The price contrast between these two neighbouring cities is actually quite striking and hard to ignore. Secondly, the concept of luxury living is more evolved in Pune, as luxury projects in the city tend to offer much better amenities and also surroundings.
In a city like Mumbai, luxury is first and foremost defined by the high prices inherent in its up-market locations – the luxury experience does not go much beyond this. Even the wealthiest of India’s financial capital find the cost of buying a moderately-sized flat in and old building bereft of any real luxury accoutrements crippling. In Pune, luxury homes are defined by much larger spaces, superior specifications and more luxury amenities at a much lower cost.
Pune was also one of the first cities to deliver convincingly on the real estate format of the future – namely townships. Thanks to the city’s generous land availability, Pune’s developers have been able to ramp up on the ‘Township City’ tag and provide more and more home buyers with this vastly superior option. Moreover, many of these townships are located close to Pune’s thriving Information Technology hubs, which spawn the greatest demand for such offerings. While Pune’s first integrated township Magarpatta City created its own IT/ITeS hub, many others are located close to the Hinjewadi IT Park.
Unbeatable Market Fundamentals
Pune’s unique combination of economic drivers ensures that purchasing power and aspiration for luxury homes will continue to grow. In fact, Pune has emerged as an investment Mecca for property investors from outside the city, as well. This is because luxury housing in this city offers better value not only in lower rates but also a superior luxury lifestyle experience.
At a market level, Pune has consistently outperformed most other markets over the last two years, bringing satisfactory ROI to investors. There is no danger of the formation of a bubble that could eventually burst. Sufficient demand for all types of housing drives Pune’s real estate market. Cities like Mumbai and Gurgaon are legendary for getting over-heated. Pune, on the other hand, has been experiencing healthy growth and not speculator-driven price inflation. Thanks to better land availability and the fact that the city is still expanding outward, Pune’s property market is kept rational by a constant influx of supply in its new real estate destinations.
Generally, Pune offers steady capital appreciation of between 10-15% per annum in most areas. The right places to invest in are its emerging corridors, which will see steady growth as infrastructure and connectivity improve. The right time to invest in these areas is while the entry point is still low. Soft launches by reputed developers are an excellent opportunity in this regard.
Arvind Jain, Managing Director – Pride Group