Young buyers trigger residential realty demand in Pune

Pune, commonly referred as the ‘Pensioner’s Paradise,’ is now fast developing into a residential destination for young buyers to invest in. There are three major factors that have resulted in this shift in demographics towards young buyers as far as residential investment goes. These include the growth of the IT sector in recent years, gaining prominence of organised retail sector as well as the cosmopolitan lifestyle that has pervaded the city.

Trend shift in demographics

Incidentally, there has been a 20 per cent increase in the number of young buyers in the city in the last five years, predominantly driven by IT professionals. This trend started way back in the 1990’s when Pune started emerging as an important destination for many established IT companies to set up their offices. There was an evident spill-over effect of talent from neighbouring Mumbai. This trend was initially limited to the BPO sector due to the huge talent pool of young English-speaking manpower from Pune and Mumbai.

Young buyers propel realty market

With property rates being considerably low at that point in time, many companies in the IT/ITeS sector set up their facilities in the city. This brought about a paradigm shift in the residential demand in the city from being driven mostly by middle-aged buyers employed in the services industry, with lower paying jobs having to save to buy a house according to their budget to a residential market flooded by young buyers, between 20 and 30, working in the IT/ITeS sector, with higher disposable incomes, and with an ambitious streak in them, dreaming of possessing a house of their own at a younger age.

Advantages Pune offers

Besides being a city with tremendous potential for employment generation in the IT/ITeS sectors as well as other industries like automobile and other engineering domains, Pune is also a prominent education hub, with many prestigious schools and colleges located across the city. Consequentially, youngsters who have come over to the city for pursuing their studies prefer to settle down here due to various advantages the city offers. Besides the wide array of employment opportunities, some other important factors that prompt them to take such a decision are the pleasant climate all through the year, the lush green and picturesque surroundings, the cosmopolitan life style, good roads and infrastructure facilities, proximity to Mumbai as well as the availability of various residential options in different budget ranges.

IT hubs preferred

Due to availability of developable land in areas on the outskirts of the city, most IT companies have set up their offices in such areas to cash in on lower prices and larger available land parcels. As a result, most prestigious apartment and villa complexes with all modern amenities have come up in such areas. Many of these were lapped up by young professionals working in companies in the vicinity.

Some of the areas which has seen considerable demand for residential accommodation from young buyers are the IT hubs like Koregaon Park, Viman Nagar, Kalyani Nagar, Hinjewadi, Yerawada, Bibwewadi, Kondhwa, Bavdhan, Aundh, Chandan Nagar, Erandwane, Kharadi and Manjri, among others. Incidentally all these areas have witnessed steady appreciation in capital as well as rental values due to the high demand for residential accommodation.

Return on investment

The easy availability of home loans also prompted young working buyers to invest in residential projects for their personal use as well as for investment purposes by renting out the apartment purchased either partially or fully. Many had also invested in plots with the prospect of availing healthy returns in future. The rate of appreciation in such IT hubs has also been steady and considerable, both in capital as well as rental terms. Many of the areas invested have high capital values between Rs 5,000-10,000 and rentals between Rs 10,000-25,000 per month. The rate of appreciation on capital as well as rental values also are between 5-15 per cent, thereby validating the investment decision of young buyers.