The Steady Increase in Real Estate Prices

The real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. By 2025, it will contribute 13% to the country’s GDP. The demand for real estate has been growing at a swift pace after the pandemic, mainly due to the recovering economy, and also to that fact that it is the second-highest employment generator, after the agriculture sector.

However, at the same time, there has been significant growth in real estate prices, which have been on a steady increase in recent years. The steady increase of real estate prices has been reported due to several factors such as the increasing inflation, growth in the supply of real estate, improvement in infrastructure, investments by corporates and foreign institutions etc.

In this blog, we will take a deep dive into the factors that contributed to these increasing prices and why homebuyers can still make good property investment in Pune with Amanora Park Town.

The Cost of Construction

As per a recent report, the cost of construction has reportedly moved up across India by at least ₹400-600 per sq.ft. on an average in the mid-to-premium categories; and around ₹200-250 per sq.ft. in the affordable segment. This may largely be attributed to the fact that demand has been very weak due to a number of factors such as limited supply and the recovering economy.

The Price Rise in Affordable Homes

Increasing interest in buying a home has led to a steady increase in real estate prices. Affordable housing in Pune may experience the most significant fall in demand, while moderately priced homes are predicted to come under stress as they will also be affected by rising interest rates.

The Rise in the Cost of Materials

Real estate prices are rising in many parts of the country. Various segments of the market, such as steel, cement, copper and even labour charges are showing a steady increase.

Developers are looking at real estate investment as a long-term investment, with high returns in the future. An important repercussion of this is, they have to pass on price increases to home buyers, who will also push up their margins as a result.

New Construction Will Even be Costlier

Prices for fully built or ready-to-move homes may not see an immediate price rise, but new constructions will definitely see the increased cost. Although new home prices may not immediately increase due to the still recovering phase, the rising cost of construction is something that has the potential to have a more significant impact on future home prices.

As the demand for real estate continues to rise in markets across the country, it is only natural that builders will look for ways to increase their market share.

In Conclusion

While the prices are surely going up, homebuyers can still take a take a good, healthy breadth as there are a lot of good Residential projects in Pune that they can invest in. One of those is Amanora Park Town — India’s first fully developed and integrated town located in the heart of Pune.

FAQs

Q1. What are the main factors driving the rise in real estate prices?

Several factors, including high demand, limited supply, and economic growth, drive the rise in real estate prices. Infrastructure development and urbanization increase property values, while inflation and favorable government policies further push prices up. Additionally, low interest rates make borrowing cheaper, boosting buying power. The growing preference for owning over renting and investments in real estate as a secure asset also contributes to the steady increase in property prices.

Q2. What are some tips for buying property in Pune?

Here are a few home-buying tips for when buying property in Pune:

Start by researching locations that offer strong infrastructure, good connectivity, and future growth potential. Areas close to IT hubs or upcoming infrastructure projects often provide better returns.
Prioritize properties from reputable developers with a proven record of timely delivery and quality construction. Understanding market trends and analyzing current property rates will help you make an informed decision.
Ensure all legal documentation, including title deeds and approvals, is clear and verified.
Finally, budget carefully by considering not just the buying price but also additional costs like registration, taxes, and maintenance.

Q3. What are the pros and cons of investing in real estate?

There are numerous pros and cons of investing in real estate. Investing in real estate offers several benefits, like a stable rental income, long-term appreciation, and the security of owning a tangible asset. Additionally, investors benefit from tax deductions on mortgage interest, property taxes, and maintenance costs. Real estate also allows for leverage, enabling higher returns through financing. However, there are downsides, including high initial costs, market volatility, and the need for ongoing property management. Real estate investments are also less liquid, making it challenging while trying to convert assets into cash quickly, and they are subject to changing legal and regulatory environments.

Q4. What are the financial considerations when buying property?

When buying property, it’s crucial to assess your budget and ensure the purchase is affordable, considering the down payment, monthly EMIs, and related expenses. Exploring different home loan options, interest rates, and tenures can help align financing with your long-term financial goals. Additionally, be mindful of hidden costs such as registration fees, stamp duty, legal fees, and property taxes, which can crucially impact your overall budget.Ongoing maintenance and upkeep are also essential considerations when financing the property. Finally, evaluate the property’s potential for appreciation and rental income to ensure a favorable return on investment over time.

Back