Unsold housing units in Pune region, including Pimpri Chinchwad and fringe villages, increased to 56% in 2015 as compared to the previous year, revealed a report on Thursday.
As per the Gera Pune Residential Property 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% when compared to the 67,181 unsold units in the previous year. The region saw the sale of 88,815 units in 2015 as against 98,968 housing units sold in 2014, the report revealed.
However, this does not mean that property prices will come down for the average home buyer anytime soon. In fact, in the budget category (at homes valued at less than Rs 4,144/ sq ft) the inventory hold up is just at about 12 months - a trend property experts consider to be healthy.
In the 12-month period ended December 2015, the average property prices measured across 3,312 projects in the Pune Metropolitan Region increased by just Rs 35 per square feet to Rs 5,096 per square feet.
It is the category-wise segment, however, that gives an insight into the amount of stress in home prices that are priced higher. Also, this indicates the massive demand for houses in the budget category.
In 2015, 44,142 units of budget houses were sold. In the same period, inventory available for sale in the segment was 43,396 units, indicating a roughly 12-month of inventory. Of this, the report said 21,685 units were ready to be sold but were unsold in the budget category, indicating a possibility of consumers still looking for houses at lower costs and the unavailability of the same.
In fact, increased demand in the budget segment has also lead property developers to increase the supply of budget homes. From 27,003 units in 2014 to 43,396 in 2015, the supply of sub-Rs 4,200 per sq ft category homes saw a 61% rise.
The other segments - value, premium, premium plus and luxury - continued to witness higher degree of stress. The average inventory in value (Rs 4,144 - Rs 5,180/ sq ft) and premium (Rs 5,180 - Rs 6,216/ sq ft) had an inventory overhang of 14 to 18 months, respectively. The premium plus segment (Rs 6,216 - Rs 7,770/ sq ft) witnessed an inventory overhang of over 20 months.
According to Rohit Gera, managing director, Gera Developments, "The supply continues to outstrip demand at this point. So, neither will the prices go up significantly nor will they drop substantially."
The possible rise in Ready Reckoner rates in April may push up the costs further. "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," Gera said.
Value of total unsold inventory in Pune region, including fringe villages and Pimpri Chinchwad among others, shot up 39% to Rs 55,323 crore over the past year
Value of ready to occupy homes alone amounts to Rs 5,000 crore
About 8,000 homes are ready to occupy and 96,000 are under-construction but unsold
Area available for sale in the unsold category is 10.24 crore square feet
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