Friday, February 29, 2008

Realty prices in suburban Pune on a downslide

DNA reports
Bargain hard to save up to 10 per cent, say brokers

After witnessing an exponential rise over the last two years, real estate prices in Pune have come down by 8-10 per cent — Rs 200-400 per square feet — with prospective buyers prepared to wait because of high interest rates, if property agents are to
be believed.

Most real estate agents admit that there is a shortage of demand. “Even second sales are not getting the expected price and owners and builders have been found negotiating hard,” says Anil Kamble, a property dealer in Camp.

According to brokers, the decline is particularly seen in the fringe areas and suburbs, which have seen an increase in construction activity in recent years. Property prices in the main city are, however, still high, they say.

“In areas like Kharadi, the property prices vary from Rs3,500 to Rs5 000 per square feet and can be brought down by another Rs300-400 per square feet by bargaining hard,” says a member of the Pune real estate association. “Similarly, in areas like Pimple Nilakh, where the rates are Rs3,000 and upwards, bargaining can save prospective buyers up to Rs250 per square feet,” he said.

Senior IT professional Anuj Pradhan, who has been trying to sell his 3BHK flat at Wanowrie, was shocked to see a reduced price tag put on his property by his real
estate agent.

“Four months ago, the broker could have fetched me Rs60 lakh, but now he says buyers are not willing to pay more than Rs54 lakh,” Pradhan says.

“The buyer response,” according to Rajesh Vaswani, a property agent in Camp, “is now less than enthusiastic.” Builders, however, are hesitant to admit the fall, he says.
Sachin Kadam, a member of the Real Estate Agents’ Association of Pune, says property rates went up by more than 60-70% in the last two years in the heart of the city.

“But of late, the prices have started to stabilise. Buyers can now bargain with builders and pay a lower price,” he says.

Because of high interest rates on home loans, prospective buyers, mostly from the middle class, have decided to wait and watch, he says.

Ranjit Tiwari, another real estate agent, however, believes that the dip in prices
is temporary and will not last more than a couple of months.

“With the kind of growth the city is witnessing, real estate can’t lag behind,” he adds.


Anonymous said...

Pune is bubble. the right price are 2000-2500 sq. in most of Area

Anonymous said...

I would say not even more than 2000. Our friends have bought most properties before 4 years on rates from 950~1200 psf. Still they are feeling the heat of EMI payments.

So after four years, we shouldn't be paying more than 1700~2000 anywhere in Pune. It doesn't make any business sense to pay more than this.

All investors and speculators are going to fall on their faces with most of their fortunes in housing investment geting wiped out just like stocks since no idiot will buy property with 60 lakhs when its value is mere 16 lakhs.

santosh said...

Most of the builder in India, including Pune, are now running short of funds as their financiers like banks, private equities, venture capitalist are in great liquid crunch. I guess, if the buyers will wait for one year then the prices will come down at least 30-40%.