Is it right time to buy a home in Pune?

This question is being asked by countless Puneites still living in rented properties, and by people seeking to make this beautiful city their home. The answer is - it is certainly the right time to invest in property in the right cities, right locations, at the right price and for the right duration. Not all cities currently have real estate markets which are performing well - in other words, where residential supply is being bought up at a healthy pace, says Kishor Pate, CMD - Amit Enterprises Housing Ltd.

Kishor Pate

Pune is one city where the residential property market has maintained its momentum even in these challenging times. In fact, Pune has been one of the best-performing residential real estate markets in the recent past. 

Not all locations in Pune are performing equally well - many areas do not yet have enough infrastructure to pull them up. But on the whole, pricing of mid-income and even premium housing is still affordable to buyers when compared to cities like Mumbai and Bangalore. In contrast, there is currently not a single location in the Mumbai Metropolitan Region which is performing well, both because of exorbitant pricing and severe infrastructure deficit everywhere.  

It is a good time for end users to buy property, but a bad time for investors. End users have a variety of options to choose from in most locations, and are in a position to bargain with developers. Also, they benefit from the inevitable long-term appreciation of residential real estate because they purchase property for self-use over long periods that often span several generations. This is an ideal scenario for appreciation, since real estate investment must always be done with a long-term view. 

Investors, on the other hand, are actually being kept at bay by most established developers as they tend to drive up prices unnaturally. Their sole intention is to sell their properties at inflated figures as soon as the market picks up again. Investors are one of the prime reasons why residential property prices in Mumbai have spiraled out of control. 

Reputed developers in Pune are not keen on having such a scenario replicated in this city. It has already seen a significant degree of investor activity, resulting in around 30% of the current residential stock being held by investors. Apart from the unnatural effect on pricing, short-term investors now represent a high-risk category for developers. Because of the slowing of the economy, many such investors are now defaulting on their payments to developers.

The genuine customer is now once again king, and no longer at the mercy of the market. The festive season is an ideal time to buy a home if one has studied the available properties on the market carefully. Developers look on the festive season as 'peak time' for sales, and are therefore very responsive to genuine buyers who are looking for a better deal.