Slowdown hits Pune real estate, unsold inventory up 56%

However, developers refuse to budge on price correction

For the second year in a row, Pune's real estate seems to be hit badly by slowing demand, says Gera's Pune Realty Report for 2015.

Unsold housing units in the region including, Pimpri-Chinchwad increased to 56 per cent in 2015 as compared to the previous year. As per the Gera Report, the unsold inventory (including ready as well as under-construction units) in the region shot up to 1,04,565 in 2015, up 56 per cent when compared to 67,181 unsold units in the previous year.

The region witnessed the sale of 88,815 units in 2015 as against 98,968 housing units sold in 2014, the report said.

However, despite the dip in the sales with increased unsold stocks, developers are still optimistic about better sales in future and are not ready for any significant price correction.

Part of the reason why prices continue to be anchored down is the increase in the total supply of projects and number of homes in the market.

"Supply continues to outstrip demand at this point. So, neither will the prices go up significantly nor will they drop substantially. Other factors that could potentially push property price up include the real estate regulatory bill that mandates builders to commit to service quality and strict timelines," said Rohit Gera, managing director Gera Developers.

As per the report, the average property prices measured across 3,312 projects in the Pune Metropolitan Region increased by only Rs 35 per square feet to Rs 5,096 per square feet.

Massive demand has been witnessed in the budget category. In 2015, about 44,142 units of budget houses were sold. In the same period, inventory available for sale in the segment was 43,396 units, indicating about 12 months of inventory. Of this, the report said 21,685 ready units remained unsold, indicating that consumers were still looking at lower prices.

Though the maximum inventory infusion and maximum inventory for sale is available in the budget category, the total inventory overhang in this segment is under 12 months.The premium-plus category with prices between Rs 6,216 per sq ft and Rs 7,770 per sq ft have just over 20 months inventory.