In the fast-paced world of Indian real estate, Mumbai and Pune have emerged as frontrunners, collectively contributing a staggering 60 percent to the national property sales tally in the second quarter of 2023. What are the driving forces behind this property sales surge in these dynamic cities?
Mumbai: The Financial Epicenter
Mumbai, often regarded as the heart of India's real estate market, maintained its supremacy by commanding the lion's share of 38 percent in the overall sales for Q2 2023. Its historical status as a major financial and commercial hub has perpetually fueled the city's property markets.
In recent years, as the city center of Mumbai became increasingly expensive, peripheral areas in Thane and Raigad districts have stepped into the spotlight. These regions have become the epicenter of property demand, driving a remarkable 16 percent growth in sales for the city in Q2 2023. Notably, Mumbai witnessed the highest number of new residential units launched in the first half of 2023, with nearly 1 lakh new homes entering the market during this period.
Pune: The IT Hub's Impact
Pune, on the other hand, has been thriving as one of India's prominent IT hubs. The phenomenal growth in the IT sector has had a positive ripple effect on the city's real estate market. Property sales in Pune surged at a remarkable rate of 37 percent in the second quarter of 2023, outpacing many other cities.
Much like Mumbai, Pune's peripheral areas have witnessed increased attention. These areas offer affordable alternatives to the densely populated and relatively expensive central parts of the city. The influx of IT professionals has not only driven property purchases but has also led to a surge in demand for rentals, positioning Pune as one of the top three cities for online home search and queries, alongside Bengaluru and Gurugram, according to Housing.com's digital platform data.
Emerging Hotspots: Mumbai and Pune
Within these bustling cities, emerging hotspots continue to catch the eye of homebuyers and investors. In Mumbai, micro markets such as Thane West, Dombivli, Bhiwandi, Kalyan West, Panvel in Navi Mumbai, and Vasai-Virar have seized the largest share of property sales in Q2 2023. Among these, Thane West and Dombivli stand out as the top trending localities not just in Mumbai but across major Indian cities.
The allure of these localities is attributed to their relatively lower property prices, proximity to central Mumbai and its commercial hubs, and excellent connectivity via road and rail networks. The upcoming metro system is poised to further enhance the appeal of these regions.
In Pune, a similar trend is evident as peripheral localities such as Charholi Budruk, Hadapsar, Tathawade, Ravet, and Hinjewadi take the lead in property sales for the second quarter of 2023. The strategic positioning of these areas, with easy access to major roadways like the Mumbai-Pune Expressway and Solapur Road, has cemented their status as attractive real estate hotspots, especially for IT professionals.
Price Segments: Trends and Drivers
In Mumbai, the price segment analysis reveals that properties valued at Rs 1 crore and above claimed the largest share, accounting for 28 percent of the city's overall sales. Mumbai's status as one of India's most expensive markets is reflected in its average property prices, ranging from 10,100 to 10,300 Rs per square foot, soaring even higher in the suburbs of Greater Mumbai district, reaching up to 25,000 to 30,000 Rs per square foot. Land costs, inflation, and input costs have exerted upward pressure on prices in this segment.
Within this Rs 1 crore and above price segment, the Rs 1-3 crore bracket dominated, with Thane West, Mulund West, and Andheri East leading the way. In the Rs 3-7 crore range, Andheri West and Powai took the helm.
Pune, in contrast, witnessed a surge in the Rs 45-75 lakh price segment, commanding a significant 36 percent of overall property sales. Localities such as Hadapsar, Hinjewadi, Tathawade, and Ravet emerged as frontrunners in this price category. Interestingly, Pune recorded a substantial 14 percent share of properties priced at Rs 1 crore and above in Q2 2023, marking a remarkable leap from a mere 5 percent recorded in the pre-pandemic era of Q2 2019. Kothrud, Bavdhan, and Wagholi stood out as prime locations within this high-end segment.
This surge in higher-priced properties can be attributed to the shift towards remote and hybrid work arrangements, especially in the IT sector. The need for home upgrades, coupled with the desire for enhanced lifestyles and amenities, has propelled demand in the higher price segments.
In a nutshell, Mumbai and Pune continue to lead India's property market, driven by their unique factors such as economic prominence, infrastructure development, and affordability. Emerging hotspots in these cities provide promising opportunities for both homebuyers and investors. Moreover, the surge in higher-priced properties underscores evolving lifestyle preferences in a post-pandemic world. As these cities adapt to changing dynamics, the real estate market in Mumbai and Pune is poised for continued growth and innovation.
Renuka Kulkarni, a seasoned real estate professional, brings over five years of diverse experience in research, consulting, and architectural design within the urban sector. Her expertise spans public and private projects, showcasing proficiency in real estate research, trend interpretation, and policy analysis. With qualifications in architecture and a master’s degree in Data Science (Business Intelligence & Data Analytics) from IIIT Bengaluru, along with an M. Tech in Urban Development and Management from TERI School of Advanced Studies, New Delhi, Renuka seamlessly blends data analytics with market insights, offering a holistic understanding of the industry in her research pieces.
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