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Problems Faced by Pune Real Estate in 2013
Like other tier-I cities, a lot has been taking place on fro t of Pune\’s reality market. While there are, certainly, some positive things happening: the demand has remained high in this fiscal year. The majority of this demand, like previous years, has derived from the IT industry. It is the stability of the market that has garnered the interest of High Net Worth Individuals (HNIs) to invest in the city. The absorption of commercial spaces has has remained stable, as compared to the residential properties. The inventories laying unused in the city are as old as 9 months. If the city overcomes the blocks that its real estate has been facing, the demand is expected to rise further, and this shall bring a boost to the property market here.
As per the report of Jones Lang LaSalle, the interest of the investors has remained high, like it was in the year 2012. The investment into commercial properties has seen a rise in 2013, thanks to the stability that Pune real estate has witnessed. With the development of Eastern Corridor, more offices have sprung up in the vicinity, and this has seen an upsurge in developer\’s interest in floating of new projects. Consequently, it directly affects the demand from buyers section. A 22-acre project by a realtor garnered the attention of an investors called Avenue Ventures, which has invested $6.5 million into the project.
This was about the positive turn of events. Now, have a look at the flip side too. The government has raised the stamp duty by 1%, making it as high as 7% of the property cost. This has been a big factor in toning down of the buyers\’ sentiments. Developers, who are already sitting over sets of vacant properties, are too perplexed to handle the increase in stamp duty. Another factor that has played wreck with developers\’ hope for sale is the long time taken for getting approvals for new constructions. To tell you the truth, it takes a year or two for them to get the consent, but by this time, the property rates get further escalated. So, in the end, it is the buyers section that has to pay the price. Like other cities, this is one of the biggest problems faced by Pune real estate today.
Another issue is related to the delinquency on part of developers themselves. A whole lot of them failed to pass the ownership in the name of the buyer to which they transferred property. The administration is now planning to take strict action towards the builders who fail to do the property conveyance deeds on time. Such a step shall bring about transparency in things.
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