The much - celebrated boom in Pune’s InfoTech (IT) sector has led to an escalation in the cost of living in the city, which could result in undesirable social tensions as happened in Bangalore. Driven by the demand from the IT and ITES (IT-enabled services) sector, real estate prices in Pune rose by 10-25 per cent over last year and by 50-70 per cent in certain IT-driven pockets in the same period.

This spurt in property prices has led to higher lease-rentals and monthly loan repayment installments. Also, the “virtual elimination” of construction of one-bedroom flats in Pune has put housing out of reach of the lower income groups.

The latest real estate review by property consultants Cushman & Wakefield has noted “abnormal increase in residential real estate costs is escalating the cost of living index for Pune.”

This was corroborated by prominent builder Rohit Gera, Honorary Secretary of the Promoters and Builders Association of Poona (PBAP).

“Property prices in some localities have risen by 50-70 per cent in the last one year. IT driven areas such as Kharadi in eastern Pune and Wakad, Pimple-nilakh and in western Pune near the Hinjewadi IT have been witnessing high-paced construction of residential flats.”Gera told TOL.

“An interesting trend is the virtual elimination of one-bedroom flats Pune as the bulk of the demand for two-and-half to three-bedroom flats’” he said.

During July 1995-2006, the percentage rise in the consumer price index (which measures increase in cost of living) for Pune was highest among seven cities including Delhi, Mumbai, Hyderabad, Bangalore, Ahemdabad, Chennai and Kolkata.

While Pune’s consumer price index (CPI) rose from 467 points to 504, registering a 7.9 per cent increase during July 2005-06, this was followed by Bangalore, Hyderabad, Ahemdabad, Mumbai, Delhi, Kolkata and Chennai.

The all-India CPI urban-non-manual employees for this period showed a 5.7 per cent rise, from 456 points to 481