The residential real estate market in Pune has recorded a surge of around 8.92% in average home prices during the past year to an average of Rs 6,298 per sq ft in June 2024, reaching a lifetime high price, said the 13th Gera Pune Residential Realty Report. The prices increased 19.95% over 24 months and 28.06% over 36 months. According to the latest edition of the report, for the period of Jan to June 2024, the rise in home prices has impacted affordability. The fall in Sales Volume, combined with the rise in Inventory Overhang has put a slight pressure on sales momentum, indicating the need for a balanced approach towards the marketplace.
The sales volume has also come down by 3.6% compared to the last 12 months. While the Replacement Ratio stands at 1.05—indicating the quantum of new supply being greater by 5% compared to sales—the Inventory Overhang has improved significantly in the PremiumPlus (from 16.26 months in 2018 to 7.23 months in 2024) and Luxury segments (from 20.59 months in 2018 to 10.22 months in 2024).
"Between June 2023 and June 2024, the number of under-construction projects in Pune rose, as did the average project size over the past decade. Projects under development show significant increase of 9.61% after a 10-year low in June 2023. As of Jun 2024, there are 3,12,748 apartments under development across the Pune region. This is an increase of 2.65% over Jun 2023, when the apartments under development amounted to 3,04,688 units. The average size of projects has increased by 44% - from 89 apartments per project, up to 128 apartments per project, over the decade between Jun 2014 to Jun 2024. The data also points towards the continuing trend of preference for larger homes, with developers launching homes sized at an average of 1,238 sq ft," said the report.
Speaking on the findings, Rohit Gera, Managing Director, Gera Developments Private Limited, said, “While the real estate market continues to show performance, the increase in prices of homes by 8.92%, coupled with the increase in home sizes driven by 1,400+ sq ft homes, is starting to affect customer affordability. Affordability has gone down to 3.98x annual income while 5 years ago affordability was 3.79x annual income in Jun 2020. Clearly, we are seeing pressure on affordability though it’s nowhere close to the peak of 5.30 and continues to remain good at present.”
Key Highlights of The Report:
Projects Under Development
The number of under-construction projects has surged by 9.61%, from 2,227 in June 2023 to 2,441 in June 2024. The increased inventory and prices have pushed the value of unsold inventory to Rs 61,849Cr as of Jun 2024 from 49,423Cr in Jun 2023. As of June 2024, 3,12,748 apartments are being developed across the Pune region, marking a 2.65% increase from 304,688 units in June 2023. Despite a 4.56% decrease from the peak, the total number of projects has dropped 35% from 3,733 in June 2017 to 2,441 in June 2024. The total Inventory Value available for sale has increased significantly by 25%, from Rs 49,423 crore in June 2023 to Rs 61,849 crore in June 2024.
Inventory For Sale
In June 2014, Near-ready- and Ready-stage inventory constituted 23% of 66,683 units of total inventory for sale. By June 2024, this has dropped to a 10-year low of 4.5% of 75,598 units, in the wake of the Ready-stage inventory at 2,384 units, down from 7,498 units in June 2014. In contrast, Early-stage inventory is at a 5-year high of 25,016 units, up from 19,116 units in June 2019, reflecting a consumer preference for lower delivery risk. Ready inventory dropped 74% from a peak of 9,005 homes in June 2018 to 2,384 in June 2024, and Near-ready-stage inventory declined from 3,691 homes to 1,000 homes.
Highest Growth In Prices Of Homes In New Projects
The average prices of homes across the city have risen by 8.92% in the last 12 months, driven by new projects, where prices have risen by as much as 15.39%. This takes the increase in rates to 19.95% over the past 24 months, and 28.06% over the past 36 months. Since bottoming out in 2019, prices have grown at a CAGR of 7.9%, reaching Rs 6,298 per sq ft in June 2024 from Rs 4,644 per sq ft in June 2020. New projects have seen the highest price growth, increasing at a CAGR of 8.3% from Rs 5,460 per sq ft in June 2020 to Rs 7,499 per sq ft in June 2024. Existing projects and new phases are also catching up, with respective CAGRs of 7.2% and 6.91%.
New Launches
New home launches rose by 5.8% over the past 12 months, totaling 99,166 units. The maximum quantum of new launches has been in the Budget segment (priced at Rs 5,081 per sq ft or lower), where launches have seen a significant increase of 16.2%. Zone-wise, the maximum increase is seen in Zone 3 (Sinhagad Road, Ambegaon, Narhe, Dhayari), where new launches have increased by 27%, closely followed by Zone 1 (East Pune – Kharadi and Wagholi), where launches have increased by 25%. PCMC (Zone 6) now accounts for 42% of all new launches in Pune followed by Zone 4 (West Zone – Balewadi, Baner, Hinjewadi etc) which accounts for 21%.
