This was revealed in a Pune residential realty report released on Thursday. The report was prepared following assessment of projects in municipal corporation areas and Pune Metropolitan Region Development Authority (PMRDA) regions.
The Gera residential report stated that there was a 2% dip in prices in the first half of the year, while the latter half saw a 1% reduction.
From a peak of Rs 5,096 per sqft in December 2015 to Rs 4,740 per sqft in December 2017, the realty market reflected a prolonged lull (see graphics), the report stated, adding that the realty market was going through a difficult phase and it was reflected in the pricing.
“The average residential property prices continued to decrease on an overall basis for the fourth consecutive year,” the report stated, adding that the pricing will be under pressure because of the lack of new inventory and the prolonged lull in the market.
The only silver lining is that with banks reducing the interest rates, an overall change is expected in the coming year. “The report also highlighted the steep drop in new projects launches as well as sales for the year,” Gera Developments managing director Rohit Gera said.
“2017 will go down in the history of Indian real estate as the year that changed the sector forever. The year started in the wake of demonetization with wild speculation that prices would go through a 30-40% price correction across the country. This put a stop on new sales. As anticipated, talks about price correction are music to anyone searching for home,” he said.
“The other major impact was the introduction of the Real Estate Regulatory Act (RERA). In one action, the government made delivery to the customers a priority and simultaneously ensured that developers, who earlier could launch a project with virtually no capital, would now require financial strength and capability before entering the business,” Gera said.
“With RERA seeing full-fledged implementation, developers are not permitted to sell apartments before getting the approvals and obtaining registration under the law. They also need to keep 70% of all sale proceeds in a designated account. All this led to a rise in the capital requirements for every project,” he added.
An analysis of the new launches in the city revealed that the reductions in the new supply have come mainly from the budget and value segments. While the entire city was mapped, central Pune had less number of apartments available for sale. The outskirts, or the emerging PMRDA region, however, saw a rise in inventory.