Infra development to push prices up in Hadapsar-Handewadi corridor
The residential real estate market in Pune has seen tremendous growth in the last five to six years, with many pockets of the city standing out. This spurt in growth can be attributed to the rising demand experienced across various sectors like IT, manufacturing and automotive industries in the city.
Price appreciation linked to infra development:
The Hadapsar-Handewadi corridor holds a lot of promise in terms of price appreciation. But for this to happen, a lot more needs to be done regarding infrastructure development in the area. One such pocket along this corridor is the IT belt along Kharadi and Magarpatta, which holds immense potential. Besides, there are a number of engineering factories that have come up along Ranjangaon, Solhapur and Saswad road. These developmental activities across sectors has the potential to contribute greatly to the economic growth of the area.
Proximity to CBD is USP of area:
The prime USP of the area is its proximity to the old Central Business Districts (CBDs) of the city, with MG road being just about 6-7 km away. Besides, it is also well-connected to Nagar Road and the Solapur Road. What is unique about the area is that it is an end-user driven market, with an end-user to investor ratio of 80:20.
Lack of infra development hampers realty growth, prices:
The real estate development along the area is greatly hampered due to the lack of proper infrastructural developments along the Hadapsar-Handewadi corridor. Many of the infrastructure development activities that were done in the recent past has also not been of good quality. This has had an adverse impact on the price potential that the area holds. Hence it is imperative that the city administration takes the onus of improving the infrastructure along this corridor on a priority basis. This could result in considerable appreciation in realty prices in the area.
IT sector prime contributor to Realty growth:
The IT sector is the main contributor towards pushing up the demand for real estate in Pune. However, other sectors like services, insurance and automobile industries have also contributed well in recent times. There has been a spurt of many small IT companies in the city in recent times. Besides, many larger IT companies have embarked on expansion drives due to which there have been many opportunities. As a result, many professionals from outside the city as well as a large number of NRIs have made their way to the city seeking lucrative professional engagements. This section of the population contributes to about 20% of the property demand in Pune.
Realty scenario along the corridor:
Currently there is a slump in the realty market along this corridor. This can be attributed to the lack of any major infrastructural facilities as well as to the poor quality of the existing infrastructure. The average sale price for residential apartments in Hadapsar is Rs. 5,150 per sq ft, with a depreciation of 7% in value compared to the last quarter. The average rental is Rs. 14 per sq ft. The average sale price for residential apartments in Handewadi is Rs. 4,300 per sq ft, with an average rental of Rs.11 per sq ft. Considering that these values are considerably low compared to many other areas of the city, it is imperative that infrastructure development along this corridor is given top priority.
Balance in demand and supply with preference for luxury homes:
Considering that the realty sector in most cities across the country has been adversely affected due to the economic slowdown, there have been significant declines in capital values. However, Pune has seen considerably lower decline in capital values compared to most other major cities in the country. With revival in the realty sector expected in most cities, it is expected that capital values in Pune would grow by about 8%, annually. Moreover, it is appreciable to note that there has been an ideal balance of demand and supply in Pune. It is also notable that a major part of the supply in the residential sector is in the high-end segment, which indicates a clear preference towards luxury homes in the city.
