Pune Developers cut back on the New Launches

The average residential property prices continued to decrease on an overall basis for the fifth consecutive half-year tracking period - from a peak of Rs 5,096 per sft in Dec ’15 to Rs 4,685 per sft in Jun ’18, the drop in the past 6 months has been a further 1.17%. The average city-wide price has come down because of lower priced new inventory because there is a gap of almost 14.77% between average Pune price of Rs 4,685 per sft & New Project price of Rs 3,993 per sft. This is because of lower priced new inventory being brought into the market.
Visible signs of consolidation taking place in the market when the recent trend of the percentage of new units being accounted for by the top 10 projects launching new units is seen, in Dec’15 – only 7% of all the new units launched were accounted for by the Top 10, while in Jun’18, this number has jumped to 15%. Sales in the value segment have picked up, 6 monthly sales in the value segment has increased by 28% to 8,445 units from 6,573 units in H2 2017.
Developers have cut back substantially on new project launches as the new project launches are down from 102,036 apartments being brought into the market from July ’15 – June ’16, to now 56,410 apartments for the period July ’17-June ’18, clearly impacted by RERA as funds now must be deployed towards existing projects and can no longer flow towards future projects.