Mr. Kishor
Pate, Amit Enterprises Housing Ltd.
Given the current
market dynamics, ready to occupy flats are certainly desirable choice for the
risk averse, as well as for those in a hurry.
However, ‘desirable’
does not necessarily equal ‘feasible’, since such flats are quite expensive in
our metros.
In cities like
Mumbai, Delhi and Bangalore, ready to
occupy flats are certainly not options for everyone.
On the other hand,
more rational markets like Pune are seeing quite a lot of absorption of
ready-to-move-in flats because the prices of even such flats are still within
one’s budget.
Currently, the demand
in Pune is more or / less equally balanced between under-construction and
ready-for-possession flats.
 |
| Mr. Kishor Pate, Amit Enterprises Housing |
That said, we are
definitely seeing a noticeable predisposition for fully-constructed budget
flats in the less expensive areas as well as for luxury homes in lifestyle
housing locations such as Sahakarnagar, Koregaon Park, Viman Nagar and Aundh.
Under construction
flats are preferred by mid-income house buyers as they are more cost effective.
Buyers on a tight budget tend to favour these options for the economic
advantage, even if they have to stay in rented housing for the duration.
Buyers focused on
under-construction flats in Pune are aware of the fact that rates increase as a
project nears completion. Those who can wait for a while definitely avail of
the early-mover advantage by booking under-construction projects.
We must remember that
Pune’s residential property market is driven primarily by the middle class,
with its implied limitations in spending power.
Investors are also
more aligned towards under construction properties, since the price advantage
adds to the overall profit they hope to generate.
Investors invariably
come into the picture at an early stage of the project cycle, while end users
come in at every point in time.
Investors seek to
lock in the cheaper purchase price at the under construction phase of a
project, and then benefit from the price advantage of selling a ready to move
in flat when the project is complete.
One can understand
the philosophy behind this strategy if one looks at the price difference
between a flight ticket booked months in advance and that of a similar ticket
bought on the day of flight.
There is no
difference in the distance traveled or / the quality of services offered – yet
the previous option is more cost-effective than the latter.
The demand for ready
to occupy properties in Pune is driven by the IT / ITES sector and some
components of the manufacturing sector.
Everyone is under
pressure, but the salaries that many people draw in these segments mean that
they can afford the luxury of a ready-to-move in flat.
Fundamentally
speaking, buyers who can afford ready for possession flats do not fall in the
category of those who are overly focused on housing loan interest rates or /
similar market dynamics.
Middle-income property
buyers are not motivated by their need for greater convenience, but by their
ability to pay for a house. Seen in this context, the greater demand in Pune
will always be towards affordable housing options.
About the author..
Mr. Kishor
Pate is CMD at Amit Enterprises Housing Ltd.
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