The demand for homes in Pune is expected to decrease from 38,800 units in 2013 to 34,500 units in 2014 resulting in a fall of 11%. However, a fall in absorption is expected to be complemented by a sharper drop in the number of new launches that are estimated to decrease by 21% from 45,370 units to 35,840 units during the same period.
We expect the sales volume to recover from H2 2014 onwards, after a lull of more than two years. It is forecasted to increase by 11% to 19,800 units in H2 2014, compared to H2 2013. The QTS ratio has been inching upwards since September 2013, signifying weakness in the market.
South Pune is slowly emerging as a preferred destination for home buyers in Pune due to its strategic location between the two major IT/ITeS employment hubs of Hinjewadi in the west and Kharadi in the east, with areas like Kondhwa, Ambegaon, Undri and Dhayari equidistance from both.
West Pune observed the sharpest fall in new launches during H1 2014, as developers curtailed launching fresh projects on the back of lacklustre demand and poor response received by the various projects launched during H2 2013.
South Pune’s health is the poorest, as it continues to carry the excess unsold inventory of projects that were launched more than two years ago. This problem has been compounded by the sharp increase in new launches during H1 2014. The bumpy ride in demand and supply does not seem to have any significant impact on price levels.
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