Pune: Gera Developments, the pioneers of real estate business and the award-winning creators of premium residential and commercial projects in Pune, Goa and Bengaluru, today released the June 2023 edition of their bi-annual report, titled ‘The Gera Pune Residential Realty Report’. It is based on primary and proprietary research conducted by Gera Developments and covers all existing projects in a 30 km radius of the city center. The report is an outcome of the longest-running, census-based study of the residential realty market of Pune, covering 151 micro markets.
Key Highlights
- The inventory for sale has reduced by 7% to 69,553 units as on Jun ’23 compared to Jun ’22.
- Affordability levels are still strong at 3.84x as on Jun ’23 and remains well below the 2014 peak of 5.27x.
- The inventory overhang (based on the offtake rate for 12 months) is still low at 8.59 months of inventory. Lower inventory for sale in the Premium & Luxury segments has led to lower inventory overhang in these segments.
- There is a 12% decrease in sales over the 6 months ended Jun ’23 compared to the same period in Jun ’22 (from 53,398 units to 47,178 units). Sales for the last 12 months have reduced to 97,214 units (July ’22 – Jun 23) from 105,625 units between July ’21 – Jun ’22. This is a drop of 7.96 %.
The latest Gera Pune Residential Realty Report for the period January 2023 to June 2023 suggests that after witnessing furious growth in the past in terms of sales and new launches – markets have streamlined at sustainable levels. Prices have increased by 11% across all projects over the last 12 months. New launches and sales have reduced; however, the replacement ratio remains healthy at 0.98, indicating that the sales are marginally more than the new inventory added. The total inventory under development across the Pune region has reduced by 5% from 315,088 to 297,801 homes. This constitutes 23.36% of the total inventory available for sale.
Talking about the findings of The Gera Residential Realty Report June 2023 edition and the latest trends in Pune’s residential real estate market, Mr. Rohit Gera, Managing Director, Gera Developments, said, “The Pune real estate market is showing dual signs of both boom and consolidation at the same time. The prices have gone up 11.03% from ₹ 5,208 per sq. ft. in Jun ’22 to ₹ 5,782 per sq. ft. in Jun ’23. There has been an across-the-board increase in the rates of new projects, existing phases of old projects as well as new phases of old projects. This indicates a strong demand as home buyers have purchased homes at higher prices than ever before. On the other hand, the overall sales for the past 12 months have come down by 8% from 105,625 units in the period Jun ’21 – Jun ’22 to 97,214 units in the period Jun ’22 – Jun ’23. This could be explained by the increase in home prices and increase in interest rates.
The increase in prices and a corresponding reduction in demand are normal indicators of a bull market.”
“On the other hand, during a boom period, there is an increase in the number of projects launched. We are presently at a 10-year low regarding the number of projects and gross inventory. Over the past year (Jun ’22 – Jun’ 23), 93,734 new homes were added to the overall inventory. This is down nearly 19.19% from the previous year’s new inventory of 115,996 homes.”
He further added, “The trend that has continued though is that of the increase of the average size of projects, reduction in the number of projects of smaller sizes, greater dominance of projects from larger developers. Looking forward, there are a couple of scenarios that could play out. If developers bring in substantial supply, we could be in an oversupply scenario since sales numbers have eased off from earlier highs.
On the other hand, constrained supply at the current equilibrium levels could see a continued steady rise in prices.”
