The year 2016-17 was a low point for Pune’s real estate industry, with the Pune Municipal Corporation (PMC) issuing a record low number
of permissions for new constructions. As per the Environmental Status Report (ESR) of the PMC, 3,095 permissions were granted for new construction projects — the lowest in the last 10 years. While civic officials blamed the prolonged effect of note ban, realtors said the high rate of real estate in PMC areas was the prime reason behind them choosing areas located beyond the corporation’s limits for new constructions.
Over the last few years, Pune’s real estate sector has witnessed a slowdown, with realtors lamenting the large inventory of unsold properties. While low sales may not have led to price corrections, builders said that in some cases, ‘informal discounts’ have been given to the end customers. In the 10-year period between 2007 and 2017, the financial year 2011-12 saw the largest number of building permissions being issued — 4,623. The number of new permissions issued was low in 2014-15 and 2012-13 as well.
Realtors pointed out that the high real estate rates in Pune were gradually making the city unaffordable for the average buyer. Rohit Gera, managing director of Gera Developments, said the average price per square foot in PMC areas was approximately Rs 7,000, while the largest number of buyers wanted properties within the Rs 4,000-5,000/square foot range. “The premiums in the PMC area are higher than those in neighbouring Pimpri Chinchwad Municipal Corporation (PCMC) or the areas under the Pune Metropolitan Regional Development Area (PMRDA),” he said.
Sachin Kulkarni, managing director of Vastushod Projects, said the civic body had almost run out of space for any new developments, so permissions for new constructions were few and far between.
Similarly, Ranjit Naiknavare, director of Naiknavare Developers, pointed to the negative sentiment in the market that has affected many players. “There has been a shift… non-serious players have shifted out of the field, which has also led to lower number of building permissions being issued,” he said.
Naiknavare said legislations like MahaRera and GST would take some time to impact the sector. However, on an optimistic note, he said that within a year or two, the real estate sector was expected to witness a boom.