The real estate market has changed in Pune and the surrounding areas due to the Covid-19 pandemic. With most supply chains getting affected by the lockdown and travel restrictions, the price of the building materials has increased significantly. Another factor that resulted in the steep house costs in Pune has been the shortage of labor due to the mass exodus. In such a scenario, the home buyers’ sentiment has been impacted negatively.
Furthermore, pay cuts faced by many and job loss escalated the of shelving the buying of flats for sale in Pune. In the process to combat the depletion of the sector, Piyush Goel, the Union Minister of Commerce and State, announced reforms. He has asked the real estate builders in Pune to cut down on the house costs in Pune.
Restructuring House Prices
Mr. Goyal suggested that the prices be scaled down to realistic levels. This would encourage the sale of the already constructed properties. Due to the price increase, many have been ready to move in 2 BHK flats in Pune lying vacant. As per Mr. Goyal, constructors holding on to higher prices negatively affect the Pune real estate market.
As a result of this advice, the city’s real estate market saw a 17 percent correction in the price. This is the first time in the last five years that the price correction has happened for the Pune real estate market. The price correction comes as a big relief to the home buyers of Pune. The report stated that the correction has made the price drop by Rs850 per square feet (sq.ft.). The price correction was recorded to be from H1 2016’s Rs 4,860 to H1 2021’s Rs 4,010.
Factors Impacting The Price
This was the average price correction, but in a city like Pune, the price of a property is determined by quite a few factors. Some of them are:
- Location,e., nearby facilities like hospitals, schools, public transports, neighborhood)
- Unit size: The larger the sq ft, the higher the price.
- Quality of the construction, i.e., the kind and the brand of materials used in the building. Higher the brand quality, the price will increase of the building too.
- Amenities e., the property’s features like a community center, playing area, walking area, swimming pools, etc.
- The age of the building is another important factor. Unless it is a high-profile property in Pune like Homi Bhabha’s house or a heritage building, the chances are the older the property is, the price is likely to go down.
Based on all these factors, house costs in Pune can range from Rs 19 to Rs 500 lakh. Typically a 3 BHK Flats in Pune can range between Rs180 and Rs 450 lakh. The average sq. ft. price can be started from Rs 7,500 and go up to Rs 16,000.
For a 2 BHK flat in Pune, the price can be between Rs 48 lakh to Rs 98 lakh. It has been witnessed the closer you are to Pune city the price increased for the houses.
As a result of this restructuring of the house costs in Pune, there has been a gradual improvement in the real estate market. It is expected with stamp duty reduction. The momentum will continue.