The Confederation of Real Estate Developers Association of India (Credai) in Maharashtra has raised alarms over the significant drop in sales within the real estate sector, citing a troubling 22 percent decline driven by the ongoing market recession. Various issues, including rising inflation, a widening demand-supply gap, elevated interest rates, and liquidity challenges, have severely hampered the sector's recovery.
The real estate industry currently contributes approximately 6.5 percent to the nation's GDP. However, a considerable amount of realtors’ time—over 40 percent of their operational costs—is squandered on obtaining regulatory approvals. Incidents of fraud in the sector have made the government particularly cautious, resulting in further delays in project timelines. There is a pressing need for greater transparency within this industry. Besides, a notable 37 percent of costs are allocated towards taxes, leaving the remainder for development expenses.
In India, ongoing projects face additional delays due to policy paralysis, exacerbating risk levels in the real estate arena. Furthermore, there remains a lack of a clear policy governing high-rise constructions, contributing to rising development costs, which have surged by 22 percent.
In Pune, numerous new budget-to-mid income housing projects are now emerging in various neighborhoods such as Dhanori, Nighdi, Kondhwa Khurd, Dighi, Manjri, Mundhwa, Undri, Warje, Ambegaon, and select regions of Hadapsar. Many of these areas feature premium and semi-premium housing options, characterized by larger floor plans and enhanced amenities.
Unfortunately, popular urban locales have become increasingly unaffordable for mid-income buyers due to skyrocketing prices amidst dwindling supply. Despite this alarming trend, developers remain resistant to lowering prices, citing rising input costs as a primary concern. As a result, demand continues to suffer adversely as the economic slowdown lingers.
Despite these challenges, Pune's real estate market has outperformed most other major metropolitan areas, with a remarkably low supply overhang compared to the seven largest cities in India.