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Saturday, October 14, 2017

Pune real estate market is in a phase of prolonged slowdown - CRISIL

Reasons for slowdown in Pune real estate market:
1) Fear of job losses in IT/ITeS sector
2) No significant creation of fresh jobs
3) Expectations of prices coming down keeping consumers on the edge
4) Confusion over the GST benefit

Pune real estate market is in a phase of prolonged slowdown - CRISIL

According to ratings agency Crisil, the realty market is in a phase of prolonged slowdown.

While it did not give city wise decline, the agency said absorption of new homes in top 10 cities (Pune included) has slipped by 8% each year since 2011.

The agency said one of the major reasons for this is investors staying away from realty purchases as prices have stagnated over the last few years.

It said people are also preferring to stay on rent.

“The sector has witnessed a decline in area booked and area launched over the last few years. Developers have been majorly focusing on mid-category luxury premium housing projects. This has created a wide gap in demand-supply dynamics, resulting in pent-up demand for affordable housing units and a huge unsold inventory of unaffordable units across most micro markets,“ Crisil said in its report.

In a sad news for those looking for a respite, the agency forecasted that “any respite is unlikely in the near future“.

Read more at - Developers go on an overdrive to woo prospective customers

Related Stories:

1) Slowdown in Pune real estate market to continue

2) Some builders in Pune haven't gone out of business yet

3) Flat buyers will now be covered in case builder goes `bankrupt'

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  1. I agree there will be prolonged slowdown in Pune RE.
    1. Make wise choice - buy ready to move in homes which has occupancy certificate
    2. For Investors investing in Mutual fund even the debt mutual funds would give you more returns than investment in real estate in the next 4-5 years.

    1. One major factor which attracted hoarders apart from black money was the ability to book loss in their other income for the interest paid towards home loan for house/s purchased for investment purposes. With new income tax norms, the limit of interest deduction has been capped at 2L/year which was unlimited earlier for hoarders. This has led to higher income tax liability for the hoarders due to which they are divesting off their real estate assets even if it makes taking a hit on the prices as holding them on has become far more expensive for them. These hoarders are now running after the same buyers who are target buyers for builders too. In coming days, expect more pressure in resale market as well.

  2. @ the monk
    If this happens it would really bring good 15- 20% correction in resale market which would in turn bring down prices of new launches
    Hoping for the best...

    1. Tata housing has officially reduced the price of it's projects by 25%, including that for Pune's La Montana.
      Rest are also following the suit, some officially, some unofficially.

  3. That's good news however la Montana is in talegao not in Pune or PCMC

    1. Who said that impact is not there in PMC/PCMC ? Each area has impact on adjoining one. Also it gives clear idea about what is happening in the real estate market. Tata housing has officially reduced prices, rest of the builders are doing the same unofficially. However, such reduction of 25% is peanuts. It has to be far greater than this.