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A prime reason for dampened transaction activity in real estate markets is the mismatch betweenconsumer expectation and the available supply. Can the supply be better aligned with consumerpreference to break this logjam in the residential real estate market? In this first edition of the fifth yearof PropIndex, we take a closer look at consumer preference on various parameters for each city covered inthe study. The insight gained from this consumer analysis can assist in better positioning of projects andlead to better transaction activity in the market.

For example, about 60% of consumer preference is for budget segments in the sub Rs 70 Lakh range.Even within this range, 62% preference is in the sub Rs 50 Lakh budget segment. Further, 41% ofconsumer preference is for 2BHK formats. Therefore, one solution for overcoming the high capital value(s)(Rs/sq ft) can be to develop smaller and smarter formats in the 2BHK category. This can addressaffordability issues by keeping the overall acquisition cost low for consumers. Developers at present seemto be focusing on introducing larger 3BHK category to increase per unit revenue with smaller inventory tosell. Such mismatch between supply and demand is leading to increase in stock of unsold inventory.

Some of the other aspects which the study highlights are top preferred localities for each budgetsegment, top preferred budget range for 3BHK and 2BHK formats, associated top localities and more.

We’ve also attempted a deeper dive into an analysis of consumer preference in a select locality withineach city. PropIndex has access to data on >10,000 such localities across the country. For these localities,we’ve fleshed out the demand parameters on the basis of budgets, BHK preferences and more.

Coming to PropIndex for Apr-Jun 2015 quarter, in line with the tepid activity in the market, the NationalProperty Index witnessed marginal increment. This increment was on account of increase in supplyaccompanied by marginal increase in capital values. Whereas Bengaluru had the highest appreciation inthe City Index at 6%, Delhi saw the biggest decline of 3%. Overall, cities in the west and south saw anappreciation in respective City Index values while north saw a decline.

The City Price Monitor also witnessed a similar trend with Bengaluru and Delhi at opposite ends of thespectrum. The movement in their City Price Monitor was 3% and -5%, respectively. The rental market wasalso fairly stagnant.

These are changing times and we would love to hear from you. Do write to us [email protected] and share yours views on this report and how we could make PropIndexeven better.

You may also share your opinion with #PropIndex on our Twitter handle @magicbricks or connect with uson Facebook at www.facebook.com/ magicbricksTOI.

FOREWORD

Sudhir PaiCEO, Magicbricks.com

IntroductionThis edition of PropIndex is a departure fromthe earlier ones as instead of looking at thedemand-supply analysis at the zonal levelfor each city, it takes an in-depth look at theConsumer Preference in each city acrossvarious parameters. The supply for each cityis captured in the macro level analysis of thelistings data to arrive at the nature andquantum of supply and price movement.The Magicbricks PropIndex is the same ascarried in the previous editions of PropIndex. Consumer Preference AnalysisThe objective of Consumer PreferenceAnalysis is to identify the nuances ofdemand across pertinent parameters toarrive at a holistic picture of what consumerswant in each city. Consumer PreferenceAnalysis is based on the analysis of searchundertaken by consumers onMagicbricks.com. The parameters on whichthis analysis has been done are:lDistribution of consumer preference bybudget: This gives an assessment of the toppreferred budget segments to acquireresidential real estate in the city. It gives anoverall picture of the consumer profile forthat city and helps to understand the natureof demand.l Top Preferred localities by budgetsegment: It helps to understand the toplocalities which people associate with eachbudget segment. This also gives thelocalities in which people are searching forresidential options in a particular budgetrange. It gives the geographical spread ofconsumer preference by budget. Further, italso helps to assess the dominant budgetsegment(s) associated with each locality.Residential projects can be accordinglypositioned in these localities.lShare of the top localities in each budgetsegment: We evaluate the percentage shareof the top 5, 10 and 15 localities for eachbudget segment. This analysis helps toidentify the geographical spread ofconsumer preference in the city. A highpercentage share means consumers arelooking for options in fewer localities whilethe opposite means the consumerpreference is more wide spread. lConsumer preference by BHK categories:We look at the consumer preference by BHK(Bedroom-Hall-Kitchen) category. Thisrelative percentage split across various BHKcategories gives an impression about theoverall affluence of the consumers. The

larger sized 3BHK category tends to have anoverall higher acquisition cost. Largepercentage of consumers preferring 2BHKcategory is indicative of price sensitiveconsumers making efforts to keep theoverall acquisition cost low. lConsumer preference in the 2 & 3BHKcategories: This is a micro-level analysis ofthe two most preferred BHK categories inthe country. Here we look at the mostpreferred localities and budget segments foreach category. In addition, we also identifythe top preferred localities for each budgetsegment. This information helps tounderstand the BHK category which aconsumer associates with each budgetsegment in a given locality. The residentialprojects can be positioned accordingly interms of price points and BHK formats. Thisanalysis has been done separately for 2BHKand 3BHK categories. l Top 10 localities by consumer preference:Here we identify the top 10 preferredlocalities by consumers for each city andtheir share of consumer preference. A highpercentage share indicates the consumerpreference is spread across lower number oflocalities and vise-versa. l Locality level analysis: In addition to themacro-analysis to understand consumerpreference at city level, a further granularanalysis has been undertaken at the localitylevel. This has been done for one locality percity where the top preferred locality hasbeen subjected to this analysis.The objective of locality level analysis is tounderstand consumer behavior at the micro-level and identify the main attributeswhich consumers associate with a locality.The parameter under which analysis hasbeen undertaken is a sub-set of what hasbeen done at the city level. This involvesaspects like preferred residential type, BHKand budget preference and preference under2BHK & 3BHK categories.

Magicbricks PropIndexMagicbricks PropIndex is a tool whichempowers property seekers and investorswith detailed information on the movementof residential apartment prices and supply ofproperties in India. No credible propertyindex can be a function of direct values asthe changes are governed by multiplefactors. Magicbricks PropIndex has takenthis reality into account and produced anindex based on listings of apartments andtheir capital and rental values on the

website. “Magicbricks has over 12.00,000active properties posted by more than 2 Lakh active users in 585+ cities and17,000+ localities. Our users includeowners, agents and developers.”

MethodologyApartment values are based on listings onthe Magicbricks site.These include multi-storey apartments andsingle units on plotted developments,referred to as builder floors onMagicbricks.com.The Index is structured in such a way thatindividual properties are aggregated intotheir respective cities and then to theNational Index. Weightages for PropIndexare based on the supply of properties withinthe locality/city. Based on this structure,PropIndex gives a realistic picture of trendsin price/supply across different propertymarkets. We have used different weightagesfor Listed Price Monitor/Rent Monitor.Therefore, PropIndex along with tablesprovided for Listed Price Monitor, RentMonitor, Yield Monitor and Capital Values,gives an excellent perspective of theproperty market performance in the quarter.While listing sand their values/supplyprovide a level of understanding of themarket, there are meticulous data checks toprevent aberrations creeping in. These arebased on statistical calculations, industryinputs and logical interpretations.The National Property Index (NPI) isindicative of the extent of activity as well asprice movements across cities and localitiesin the major active cities onMagicbricks.com. The index includes the top11 cities, chosen based on their activitylevels, has an individual city report for each.While the NPI and its movement is ofinterest to the expert community of bankers,builders and investors, the PropIndex hasalso taken care to explain the nuances of theindex movements at the locality level thatwould help the huge data base ofMagicbricks.com consumers.The PropIndex is the result of meticulousresearch at the locality level and throughdetailed discussions with experts atMagicbricks.com’s offline and onlineinitiatives. The Indian real estate market isdynamic and the PropIndex reflects thosechanges. Since it is derived from a dynamicdatabase, additions and deletions oflocalities happen as a function of changingmarket dynamics.

METHODOLOGY

There is a wealth of information within these pages. For better readability, we have presented some data as tables and others asgraphs. Between them, you will find how property markets have performed in the Apr-Jun 2015 quarter from differentperspectives – from that of capital appreciation, from a rental/yield realisation perspective and from a supply standpoint. DemandAnalysis section also explains what consumers look for.

We recommend that you evaluate the city report in its entirety and that will provide a rounded perspective of the performance ofthe property market within each city. Here are the details of what you will find in each of the city reports enclosed within:

1. City Property Index – This is a composite index which is a function of supply of properties as well as the average capitalappreciation/drop in various localities of the city in the quarter. The City Index is the weighted average of the average rate persquare foot in that locality and the supply of properties from that locality. Premium localities (with higher average rate persquare foot) as well as localities with higher supply of properties will have a bigger impact on the Index. For example, if thesupply of properties from a premium locality drops, that locality will end up having a lower weightage in the Index which inturn will push the Index downwards (and vice-versa). On the other hand, supply of properties remaining unchanged, theIndex will be influenced by capital appreciation within the locality.

2. Listed Price Monitor – This metric shows the capital appreciation/drop within a locality and is calculated on the basis ofmovement in the “average rate per square foot” within that locality. By and large, the movement in the “average rate persquare foot” reflects capital appreciation/drop. However, in a few select cases, we have observed that the average rate persquare foot moves due to a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments,which command a higher per square foot rate, changes over the quarter). In these few circumstances, the Listed Price Monitorwill, in turn, reflect this input. Such changes have been explained in the text of the City Reports.

3. Rent Monitor – This reflects the rental appreciation/drop within a locality. It is calculated on the basis of movement in the“average rent per square foot” within that locality. By and large, the movement in the “average rent per square foot” reflectsrental appreciation/drop. However, in a few select cases, we have observed that the average rent per square foot moves due toa change in the mix of apartments within that locality (e.g. if the ratio of premium apartments, which command a higher persquare foot rent, changes over the quarter). In these few circumstances, the Rent Monitor will, in turn, reflect this input. Suchchanges have been explained in the text of the City Reports.

4. Yield Meter – Yield is the annual rate of return earned on property. The Yield Meter depicts the gross yield percentagesacross various localities. Gross yield is a ratio of average annual rental value to the average capital value of the property.

5. Capital Value Tables (given in Annexures) – This shows the actual range of prices within which properties were available ineach locality in the quarter. Prices are shown in Rupees per square foot basis, these are the prevailing rates for properties ineach locality.

6. Consumer Preference Analysis – This analysis of consumer demand is based on searches and requirements that usershave performed on Magicbricks.com. The top localities by demand gives an insight into consumer preferences. The demanddata has been used to arrive at various aspects of consumer requirements including Budget-wise analysis, Property typeanalysis and BHK configuration analysis.

7. Editorial Speak – PropIndex has gone from strength to strength – adding more analytics, insights and diverse views inevery edition. To enhance the insights provided by our data, PropIndex now includes city perspectives from editors of theTimes Property.

GLOSSARY & DEFINITIONS

APR-JUN 2015

In line with general lack of activity in theresidential real estate market, theNational Property Index (NPI) has also

witnessed minimal movement over theprevious quarter. This is in continuation ofthe general trend of inactivity observed overthe last 24 months (including the currentperiod between Apr-Jun 2015).

NPI is the weighted average of supply andvalues across 11 cities in India.

Regionally, north India comprising ofDelhi, Noida/Greater Noida, Ghaziabad andGurgaon saw a drop in index values.Compared to this, south and west Indiawitnessed a rise in index values of 4% and2%, respectively. Kolkata in the east alsosaw a drop in index values.

The Index movement in the current Apr-Jun 2015 quarter can be attributed to anaverage 26% increase in supply withmarginal price change. Only four cities sawsome positive movement in prices whileothers either stayed at the same level or sawan overall dip.

Bengaluru emerged as the city withmaximum increase of 6% in index values inthe current quarter. This was followed byHyderabad with 4% increase and Mumbai &Pune with 3% increase each. The largestdrop in city index was witnessed in Delhiwith the index values falling by 3%. Cities innorth India either witnessed a drop in indexvalues or remained at the same levels as inthe previous quarter. Ahmedabad was onesuch city which remained at the same levelduring this quarter.

While the Reserve Bank of India (RBI) didlower interest rates leading to banks passingon the benefit to consumers in terms oflower home loan rates, the same has nottranslated into transaction activity on theground. This general lack of interest byconsumers is also reflected in the HousingSentiment Index (HSI) report which saw afurther decline of 14% in consumersentiments in the Apr-Jun 2015 period.Further, for the first time, hitherto stablemarkets such as Bengaluru, also saw a dropin consumer sentiment.

The markets remain subdued with large

unsold inventory with pricing which wasbeyond the affordability range of consumerslooking to buy.

At the time of writing this report, RBI didnot reduce the Repo Rate as part of the thirdbi-monthly Monetary Policy Statement for2015. This is most likely to keep the homeloan rates at the current level. Consumers arelikely to adopt a further wait and watchpolicy in terms of their buying decision.

Various policy announcements by theCentral and state governments, such asSmart and Amrut cities plan, the list of citieswhich have applied for Smart City status,Make in India, Clean India and Skill Indiahave not enthused consumers to startbuying. Policy optimism needs to translateinto consumer enthusiasm.

IN THIS REPORT:

National Property Index...............1Pune.........................................4Annexures................................15

[National Property Index (NPI)]

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NATIONAL PROPERTY INDEX

The City Index for Ahmedabad remainedstable. An increase in supply across alllocalities was observed. Some localitiesposted double digit growth in supply, butmost had low base numbers initially. Over40% of supply in the residential segment isin the Rs 40 -70 Lakh segment.

More than 70% localities in Bengaluruposted an increase in average capital values.A slightly higher number saw an increase insupply as well. Overall, the Bengaluru CityIndex saw maximum appreciation in the lastquarter at 6%. Eastern and south-eastBengaluru comprising of Whitefield,Sarjapur Road and Electronic City was thelargest contributor to supply in the city.Bengaluru remains a price sensitive city withalmost 50% of consumer preference for theRs 60 Lakh budget segment.

Chennai City Index saw a marginalincrement of 1% in the index value. Whilethere was 52% increase in active listings inthe city, the Index remained subdued asonly 44% of the localities witnessed positivemovement in capital values. Overall, thePrice Monitor for the city fell by 1%.

Delhi witnessed a decline in City Index aswell the Listed Price Monitor. Whereas DelhiCity Index fell by 3%, the Listed PriceMonitor saw a decline of 5%. Delhi also sawan overall increase in active listings but only29% of localities saw any positive

movement in price points. In the 71%localities that showed price movements,most posted a decline in capital values.

Indirapuram and Raj Nagar Extensioncontinued to be dominant localities in termsof supply in Ghaziabad. Both togethercontribute more than 50% of total supply inthe market. As has been the general trend inthis quarter, the city saw an increase in thenumber of listings while the Listed PriceLevel remained the same as the last quarter.

In Gurgaon, while there was almost 30%increase in active market supply, a drop inthe average capital values arrested thegrowth of the City Index. Majority of thelocalities noted a rise or drop in the averagecapital values between -5 to +5 per cent.Close to 60% of the tracked localitieswitnessed a drop in average capital values.Sohna Road remained the most preferredlocality in the city.

At 4%, Hyderabad recorded the secondhighest increment in City Index Value afterBengaluru. Western Hyderabad, centered onGachibowli and comprising of otherlocalities like Manikonda and Kondapur,continued to be top localities in terms oflistings. Localities witnessed an average 2%increase in property values. The city also sawan increase in the overall number of activeproperty listings.

The City Index for Kolkata declined by 1%over the last quarter. The localities on an

average witnessed 1% increment in capitalvalues. However, only 45% of localitiesshowed positive movement in capital valueswhile the rest saw a decline of 1% to 7%.Consequently, even an overall increase inlisted properties could not lead to anysignificant change in the City Index.Rajarhat, EM Bypass and Garia continued tobe top localities in terms of availability ofactively listed properties.

Mumbai noted a positive movement inboth City Index and Listed Price Monitor.While the City Index improved by 3%, theListed Price Monitor saw an increase of 2%.The localities also saw an average increaseof 2% in capital values with 67% localitiesshowing positive movement in capitalvalues. Most localities along the WesternExpressway showed an increment in capital values.

Like other cities in the National CapitalRegion, Noida also saw a drop in City Indexas well as Listed Price Monitor. Where theCity Index dropped by 2%, the latterdecreased by 1%. Overall, capital values inall the sectors remained flat with only a fewmanaging between 3%-4% increase. NoidaExtension and sectors along the Noida-Greater Noida Expressway continued tobe the source of most active listings.

With 77% localities experiencing positivegrowth in capital values and an overallincrease in the number of active listings,Pune saw a 3% increase in City Index and a2% increase in Listed Price Monitor. Kharadiand Viman Nagar in north togetheraccounted for most listed properties. Apartfrom them, Wakad and Wagholi alsocontributed to the supply of actively listedproperties in the Pune real estate market.

NATIONAL CONSUMER PREFERENCEANALYSIS

Analysis of consumer preference onbudget lines and juxtaposing the same withavailable supply brings forth the mostimportant issue affecting the market –demand supply mismatch. It is importantto note that consumer preference revealedby search data on Magicbricks website hasbeen used here as a proxy for demand.

-1%

This demand-supply mismatch manifestsitself in two ways. Firstly, in the budgetsegments with strong consumer preference,the supply available falls short of requirement.But, supply exceeds demand in the higherbudget segments. Thus, there is a demandelement which is not serviced in sufficientnumbers while developers are concentratingprojects in the budget segments which havelesser demand.

Therefore, while the budget segmentbetween Rs 30 - 70 Lakh represents 50% ofoverall demand, the corresponding supply isonly 36%. For each individual budget segmentin this range, the average gap in demand andsupply is 4%. However, as the budget rangeprogresses, the mismatch first becomes zeroand then reverses trend i.e. the percentageshare of supply in these budget segments ismore than the percentage share of consumerpreference. Hence, while the Rs 1 Crore andabove segment comprises one quarter ofconsumer preference, the share of supply is36%. The budget segment between Rs 70 Lakhto Rs 1 Crore seems the only one which ismatched in terms of demand and supply.

The propensity of developers to launchprojects in higher budget segments is also

evident in the mismatch between BHK wisepreference and available supply. As the graphshows, while the 1 and 2BHK segments have ademand-supply mismatch, the situationreverses in case of 3BHK and above segment.

This mismatch adversely impacts theaffordability of home buyers. Formats of 2BHKare smaller in size (sq ft) and this helps to keepthe overall acquisition cost low. Almost 80% of2BHK options across 11 cities covered in thisstudy are under 1200 sq ft of built-up area.Within this range, the 1000-1200 sq ft built-uparea segment forms the largest componentwith 40% overall share. As compared to this,64% of 3BHK options are in the range of1200–1800 sq ft built-up area. Here again,1400-1800 sq ft range forms 46% of overallsupply. Therefore, for the same capital value(Rs/sq ft), a 3BHK of 1400 sq ft will cost atleast 27% more than a 2BHK with 1100 sq ft.

By this logic residential stock in the budgetand BHK segment with relatively less supplyshould be doing well. However, the subduedlevel of activity in the market belies this. Thereason being that projects within the budgetrange of a consumer may be situated inlocalities or zone of a city which is notpreferred while projects in preferred localitiesmay be out of budget range for a consumer.

Till this mismatch in consumer preference andsupply at various levels is addressed, alongwith improvement in economic condition, themarkets are likely to remain subdued.

03VOL5, ISSUE 1; APR-JUN, FY 2015-16 propindex.magicbricks.com

Consumer Preference &Supply in BHK segments

PUNE 04VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

Maharashtra govt to soon startbuilding plans online

Double tax as penalty for illegalextension for 5000 owners

Developer can’t cancel agreementunilaterally a ruling said

PMRDA ups ante againstillegal Constructions

PMC asks state and central govtsfor aid to receive pending projects

Recommendations to changebuilding rules

The City Index witnessed an increment of 3% while the corresponding Listing Price Monitor increased by 2%

[CITY INDEX]The Pune City Index witnessed a gain in index value in the Apr-Jun 2015 quarter

PUNE REAL ESTATE IN PERSPECTIVE Q1 2015

As it happenedPUNE, Maharashtra

HOT NOTProperty registration rakes inRs 20,000 crore

No. of online property tax payers in PCMC areasgo up to 61,000

Discount schemes bump up PMC’s property tax collectionby over Rs 102 crore

Transfering a property to be costlier in PMC limits

Smart cities plan is not going to includePimpri Chinchwad

Maharashtra government not to revise premium forland conversion

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[PROPINDEX - PUNE]After remaining stable over the last couple of quarters, Pune witnessed a 3% increment in Apr-Jun 2015.This happened as 77% localities experienced positive growth in capital values and there was an overallincrease in the number of active listings. The city also saw a 2% increase in the Listed Price Monitor.

l Pune was among the 5 cities out of 11which witnessed a positive movement inthe City Index. The 3% increment in theApr-Jun 2015 quarter is the third highestafter Bengaluru and Hyderabad

l Leading localities like Wakad, Kharadi,Wagholi, Baner and Hinjewadi saw anincrement in the 1%-4% range. Overall,77% localities saw an increase in capitalvalues leading to an increase of 2% in theListed Price Monitor

l The rental market was stable with somelocalities gaining in rental yields whileothers witnessing a drop. Hadapsar sawa 5% increase while Baner saw a 2% drop

l Pune also remained a price sensitivemarket with just four budget segmentsi.e. Rs 50-60 Lakh, Rs 40-50 Lakh, Rs 60-70 Lakh and Rs 30-40 Lakhcontributing 55% of consumer preference

l The city is growing radially with localitiesin west Pune being high on consumerpreference. This can be explained in termsof accessibility and connectivity

l Bulk of consumers at 52% preferred 2BHKapartments followed by 25% share for the1BHK category. This again highlights theprice sensitive nature of consumerpreference as smaller formats help tokeep the acquisition cost low

l Nearly 54% consumers associate 3BHKoptions with the budget range of Rs 80 Lakh to Rs 1.3 Crore. Similarly, 56%consumer preference for 2BHK segment isin the Rs 40–70 Lakh segment

l While supply in the market is generally inthe same budget segments as consumerpreference, the percentage share of thepremium segment has increased,accounting for one-third of total supply

l As against 23% share of 3BHK & abovecategories in preference, the percentageof active listings is 34%. This can bebecause of developers launching moreprojects in the premium segment

[Key Takeaways]

Pune has a huge mid-segment marketwhich is continuing to grow at a rapidpace. This segment is mostly fuelled by

those starting out in life, hence there is notruth in the statement that real estate priceswill come down.

The real estate sector today is certainly noton a roll but as far as Pune is concerned it hasmanaged to maintain its status as a saferesidential investment destination.

Although the rate of appreciation hasdeclined marginally over the last 18 months,this trend is in keeping with the generalscenario, which is looking at picking up in thenext few months. Considering the mid-segment market is growing rapidly, a1000 sq ft flat in the price band of Rs 50-60Lakh still finds a large number of takers here.

The drivers of the mid-segment market arethe second home buyers, migrants and theentry-level workforce.

Interestingly, township projects seem to bein demand. The trend is also to book a propertyin the pre-launch stage so a good deal can bestruck with the promoter. To enhance sales andinvolve mid-segment buyers, developers havelaunched offers and schemes like ‘pay 20 percent now and the rest after possession.’ Theseseem to be catching up with investors who arelooking at toward staggering the cost of a flatover a period of time.

It would be wrong to say that buyers whohave been waiting in the wings for realty pricesto come down will in anyway see a silver lining.Though there is some scope of negotiation,realty prices are certainly not looking at adownward trend in any way.

Most buyers are happy to purchase oncethey reach a price point and are satisfied withthe location. Hence, the slowdown, if at all, iscertainly temporary.

Now that the Pune Metropolitan RegionalDevelopment Authority (PMRDA) is in place,there is hope that long-pending infrastructuralissues and Pune’s development plan will beaddressed on priority. PMRDA has been formedto act as a nodal point between differentregional and planning authorities.

Besides, civic bodies, PMC and the PCMCare trying to book a berth in the PrimeMinister’s ambitious Smart City plan. Thefringes of Pune including Hinjewadi, Wakad,Kondhwa, Kharadi, Aundh and Baner haveemerged as vibrant real estate hubs and the listis only growing. After all, Pune has a widebouquet of properties on offer.

The bouquet is large

[email protected]

EDITORIAL


[Distribution of Consumer Preference by budget]Mid budget segment continues to dominate consumer preference

[CONSUMER PREFERENCE ANALYSIS]

Budget 1 2 3 4 5

Upto Rs 30 L Hadapsar Wagholi Pimpri Chinchwad Pimpri Chinchwad Talegaon Dabhade

Rs 30-40 L Wagholi Hadapsar Wakad Pimpri Chinchwad Sinhgad Road

Rs 40-50 L Wakad Wagholi Hadapsar Pimpri Chinchwad Hinjewadi

Rs 50-60 L Wakad Wagholi Pimple Saudagar Kharadi Hadapsar

Rs 60-70 L Wakad Pimple Saudagar Baner Kharadi Wagholi

Rs 70-80 L Wakad Pimple Saudagar Baner Kharadi Bavdhan

Rs 80-1Cr Wakad Pimple Saudagar Baner Kharadi Viman Nagar

Rs 1-1.6Cr Baner Wakad Kalyani Nagar Kharadi Pimple Saudagar

Rs 1.6 -2Cr Baner Kalyani Nagar Viman Nagar Aundh Fatima Nagar

Rs 2-2.6Cr Baner Wakad Pimple Saudagar Balewadi Kalyani Nagar

Rs 2.6-3Cr Baner Kalyani Nagar Kharadi Balewadi Wakad

Rs 3Cr & Above Viman Nagar Kalyani Nagar Pimple Saudagar Warje Baner

l The Pune market has a healthy share ofconsumer preference in the mid to premiumsegment wit Rs 50 Lakh to Rs 70 Lakh segmenthaving 29% share of consumer preference. The

share of sub-Rs 50 Lakh bracket is 31% which isin line with most cities.

l Eight localities dominate the consumerpreference across all budget segments and

account for ~48% share of thetotal property searches.

l The same eight localities haveapproximately half of the share inthe most preferred budgetsegment of Rs 40-70 Lakh.

l In the premium segment (Rs 70 Lakh – 1 Crore), this sharerises to 56% of the total consumersearches.

l On an average, top 5 localities ineach budget segment have ashare of more than 30% ofconsumer preference.

l Wakad has the highest consumerpreference share across most ofbudget segments followed byBaner, Pimple Saudagar, Wagholiand Kharadi.

l While Wakad has dominantposition and significantly largeshare of consumer preference inRs 60 Lakh – 1 Crore segment,Baner is holds the samedistinction in Rs 1 Crore and abovecategory.

[Top preferred localities by budget segment]Western suburban areas continue to remain high in consumer preference


Higher budget segments are concentrated in fewer localities

When consumer preference is concentrated in fewerlocalities, prices tend to go up as demand rises.When supply is spread across larger geography,demand spreads across more localities and thiskeeps a check on rise in prices. This does not apply tothose areas where supply is extremely high andproperty prices are very low.

l For each budget segment, consumer preference remainsconcentrated in the top 5 to 15 localities in the city

l Consumer preference in lower budget segments isspread across more localities as compared to premium orluxury segments where it is in fewer localities

l The consumer preference in affordable to mid-segmentis wider based and the top 5 localities account for about25%-30% consumer preference

l In the upper mid to premium segment (Rs 60 Lakh to Rs 1.4 Crore), similar statistic as above, averages morethan 40%. This becomes more acute when the top 15localities are taken into consideration. These account for70% of all consumer preference

l The luxury segment (Rs 1.4 Crore and above) alsodisplays an almost similar consumer preference behavior.Viman Nagar and Kalyani Nagar in the northern half ofthe city are the main preferred destinations

[Share of top localities in each budget segment]


l There is a predominant preference for2BHK category which has 52% share ofconsumer preference. This is followed by25% share in 1BHK segment while 3BHKcategory accounts for only 30% share

l The preference for 2BHK and 1BHKsegments reflects on the low purchasingpower and price sensitivity of theconsumers. The smaller sized 2BHK and1BHK apartments assist a consumer tokeep his overall acquisition cost low

l 3BHK format helps to fill requirement forbigger format homes and caters toconsumer requirement in the higherbudget segments

l It is not surprising that in this market, theconsumer preference for 4BHK & aboveformat remains very low at mere 3%

[Consumer preference in the 3BHK category]The 3BHK category has come to be associated with the premium segment in the city

[Consumer preference by BHK categories]Driven by affordability, consumers continue to prefer the 2BHK category

l Search data shows that 3 BHK category is associated with premium segment

l 47% consumer preference for thiscategory is in the budget range of Rs 60-70 Lakh to Rs 1.4-1.6 Crore

l Importantly, 60% of the above consumerpreference is in the premium Rs 90 Lakh –Rs 1.6 Crore bracket

l Top 5 localities in Rs 80 Lakh – Rs 1.2Crore range account for 50% or moreshare in search for 3 BHK options

l Consumer preference for 3 BHK segmentis concentrated in few localities with first3 localities itself having 50% share oftop10 localities

l Wakad followed by Baner are the twomost preferred localities in this category

Top PreferredLocalities

Top PreferredBudget Segment

[Top preferred localities for 3BHK category and budget segments]Western Pune dominates preference in the 3BHK category

Budget (Lakh) 1 2 3 4 5

Rs 80-90 Wakad Pimple Saudagar Kharadi Baner Viman Nagar

Rs 100-110 Wakad Baner Pimple Saudagar Viman Nagar Kharadi

Rs 90-100 Wakad Pimple Saudagar Baner Kharadi Pashan

Rs 120-130 Baner Kalyani Nagar Wakad Pimple Saudagar Kharadi

Overwhelmingnumber of consumersprefer 2BHK formatwith aim of keepingacquisition cost withinreasonable limits andovercome theprevalent high capitalvalues in most of thelocalities


l Only 10 localities in the city account for45% of the total consumer preferenceacross different budget ranges and BHKcategory segments

l Increment in the percentage share whenmore localities are added to the top 10 listis very gradual. This alludes to low level ofconsumer preference for localities outsideof the top 10 highlighted in the chart

[Consumer preference in the 2BHK category]Consumers look for affordable 2BHK options in the city

more evenly spread across multiplelocalities in the city

l Prime suburban localities account formore expensive budget preference in 2 BHK segment

l Top 5 localities in Rs 60-80 Lakh budgetsegment for 2 BHK have a share of 40%-50% of total consumer searches in the city

l Searches in lower budget segment like Rs 50-60 Lakh is more evenly spread andtop 5 localities account only for 34%searches

Top PreferredLocalities

Top PreferredBudget Segment

[Top preferred localities for the 2BHK category and budget segments]Locality preference in the 2BHK category is also for western Pune

Budget (Lakh) 1 2 3 4 5

Rs 60-70 Wakad Pimple Saudagar Baner Kharadi Wagholi

Rs 50-60 Wakad Wagholi Hadapsar Kharadi Pimpri Chinchwad

Rs 70-80 Wakad Baner Pimple Saudagar Kharadi Bavdhan

Rs 40-50 Wagholi Wakad Kharadi Baner Pimple Saudagar

l Consumers are seeking affordable 2 BHKoptions with locality determining theprice bracket

l About 70% of consumer preference for 2 BHK is in sub-Rs 60 Lakh bracket with

Rs 30 Lakh and lower segment forming65% of this range

l Except for the top preferred locality(Wakad) which has relatively high share inthis category, consumer preference is

[Top 10 localities by consumer preference]Wakad continues to be the most preferred locality in the city

Consumers are looking for 2BHKoptions in establishedlocalities and are evenwilling to pay apremium for preferred addresses inthe city


l Consumers are overwhelmingly lookingfor 2 BHK options followed by 3BHK and 1BHK options

l Over the last 8 quarters, the percentageshare of 2BHK preferences has increasedby over 20% in absolute terms to reach

the present level. This has been primarilyat the expense of 1BHK and 4BHK &above categories

l This increase in preference for the 2BHKcategory can be explained in light of highcapital values (Rs/sq ft) in the locality. This

in turn leads to relatively smaller sizedresidential units to keep the overallacquisition cost down for consumers

l After a drop in share over the last fewquarters, the 3BHK segment has alsoreached its earlier level of preference

[LOCALITY LEVEL ANALYSIS - WAKAD]

l Most of the consumers are looking formulti-storey apartment options in thislocality

l The preference for this format is mostlikely driven by the affordability andavailability factors. Along with which thefact that this is the most numerous formof development seen in the locality

l Approximately 15% of people are alsolooking for independent residentialhouses followed by another 8%

consumers who are looking for residentialplots to build their own houses

l Given the high capital value prevalent inthe locality and observing the demand-supply situation with respect to land,scope for large scale horizontaldevelopment is limited here. This meansthat credible options in the residentialplot or independent house segments willbe limited and such transactions will beon the higher side of the budgetsegments

[Consumer preference by residential category]Apartments continue to be the most sought after residential format

[Consumer preference by BHK category (apartments)]Consumers continue to seek 2BHK solutions for their residential needs


l The graph shows that consumerpreference for a locality is nothomogenous but spread across differentbudget ranges

l And while residential options in variousbudget ranges may be available for eachlocality, the consumers associate eachlocality with a certain image andassociated budget segment(s)

l Residential project(s) in a given localityneed to be positioned accordingly toensure they fall in consumer preferencerange for the subject locality

l 30% of consumer search in the locality isfor premium to luxury segment in budgetrange of Rs 60 Lakh to Rs 1.6 Crore

l And while 46% consumers are looking forsub-Rs 30 Lakh options in the locality, thispreference is unlikely to be addressed due to high capital value prevalent in the locality

l Analysis of Q-on-Q consumer budgetpreference trend over last 8 quarters alsohighlights the changing profile of thelocality. Consumer preference is movingfrom low to mid buget segment

l While consumer preference in budget upto Rs 60 Lakh bracket has decreased froma high of 62% to 31% as of Apr-Jun 2015quarter, the share of premium and luxurysegments from Rs 80 Lakh to upwards has increased from 9% to 35% in thesame period

l This points to changing profile of thelocality an its perception amongst theconsumers

l Consumer’s now precieve the locality as a mid to premium buget destination inthe city

[Top 10 budget segments for a given locality]One third of consumers are seeking premium and luxury options in Wakad

[Budget preference by BHK category]One third of consumers are seeking premium and luxury options in Wakad

l For the 3BHK category in the locality, 40%of consumer preference has been noted inthe premium/luxury segment of Rs 80 Lakh – Rs 1.2 Crore

l Similarly, 44% of consumer preferenceshare for the 2BHK segment is in the Rs 60-80 Lakh budget category in thegiven locality

l These taken together, show that the Rs 60 Lakh - Rs 1.20 Crore budget range isassociated with and preferred byconsumers in Wakad

l The preference in the lower budgetsegment of Rs 40-50 Lakh is very low atonly 6%, implying that consumersperceive the locality as premium

3BHK 2 BHK


[SUPPLY ANALYSIS][Property listings distribution by budget segment]Premium and luxury segment now forms one-third of total supply

l The consumer preference share of luxuryand premium categories in the Rs 1 Crore& above budget segment stands at one-third of the total listings

l From the consumer preferenceperspective, the mentioned luxury budgetrange accounts for only 18% of totalpreference in the city

l This consumer preference indicated apotential overload of property supply inthis segment as compared to theconsumer preference

l While the 2BHK segment dominates theavailable options in the city, followed bythe 3BHK category, the 1BHK segment isalso gaining prominence

l As against only 23% of consumerpreference, the 3BHK and 4BHK & abovesegments form 39% of overall listingsavailable. These higher format BHKcategories are expected to serve demandin the higher budget segments

l The 4BHK & above segment in the city onits own accounts for 10% of the supplyand is specifically meant to cater to theconsumer preference in the high-endbudget segments

[Distribution of property listing by BHK category]Format of 1BHK is becoming prominent in the overall supply matrix

The real estate marketis yet to fully respondto the increasingconsumer preferencein the 1BHK segment.The current supplyfalls shorts ofconsumerexpectations


[Key parameters – 2 BHK category]Fills the consumer requirement in the affordable to mid-segments

l The 2BHK segment represents thecategory which addresses requirement inthe mid to premium segment

l Accordingly, 54% of listings as per budgetare in the Rs 50-80 Lakh segment while interms of built-up area, 55% properties arein the 1000-1400 sq ft category

l In the lower built-up area (sq ft) segmentthe 700-1000 sq ft area options constitute42% of the overall supply in the market.The built-up area options in the given2BHK segment helps consumers inkeeping the overall acquisition cost lowfor consumers

l A small 3% of properties are also availablein the 1400 sq ft and above range

l The built-up area ranges in the 2BHKsegment permit a consumer to either availaffordable options or acquire property inan expensive but preferred locality at alower overall acquisition cost

l Approximately two-third of listings areseen in the budget range of Rs 70 Lakhand above. Of these listings, more than50% are noted in the Rs 80 Lakh - Rs 1.1 Crore segment

l In terms of available Built-Up Area (BUA)options, with a small exception, the 3BHKformats are big. For e.g, 50% of listings arein the 1200–1600 sq ft range and rest ofthe 55% fall into still larger BUA formats

l Taken together, the above two pointsshow how the 3BHK format ends up beingexpensive. Even if the per sq ft rate isrelatively low, the size of the apartmentwill make the total acquisition cost high

[Key parameters - 3BHK category]3 BHK format is positioned for premium and luxury segments


l As the Kalyani Nagar-Ramwadi Flyover became operational,connectivity to other centre of business from Kalyani Nagar andViman Nagar got shortened by 8km, pushing up values. Price rise inHadapsar is attributed to the state’s proposal for forming its ownmunicipal authority to improve civic amenities

l Baner witnessed a marginal rise in prices owing to increasingenquiries from NRIs from Pune, from the IT sector and otherindustries, as they rightly see it as the best place to settle in on theMumbai-Pune Expressway, when they relocate

l Poor physical infrastructure impacted prices in NIBM Road andBalewadi. Open garbage disposal and overflowing drains has raisedconcerns while delayed projects in Balewadi kept the prices down

LISTED PRICE MONITOR

Locality Average Rental Average Capital Gross Value (Rs/sqft/mth) Value (Rs/sqft) Yield

Kharadi 14.25 6190 2.76%Baner 14.50 7180 2.42%Wakad 13.50 6125 2.64%Wagholi 10.00 4460 2.69%Viman Nagar 20.50 7520 3.27%Hadapsar 15.50 5850 3.18%Kalyani Nagar 22.00 9290 2.84%Magarpatta City 19.25 7660 3.02%NIBM Road 13.50 6165 2.63%Balewadi 13.25 6610 2.41%

Y I E L D M E T E R

RENT MONITOR

l Being closest to the IT hot bed of Magarpatta city, Hadapsar saw a5% rise in rental values, the only area to witness an increase invalues. This is attributed to robust hiring in the IT sector. The askingvalues went up, seeing an overall increase in the total cost

l Despite affordable rental values, home seekers lost interest in NIBMRoad owing to poor living conditions and the foul smell due todisposal of garbage in open grounds, contributing to a 6% drop inrental values.

l Unavailability of quality construction has brought down the rentalvalues by 4% in Balewadi. There is very less occupancy here owing tolack of basic amenities. Over all the market remained stable as mostof the localities did not witness any price change

2%

l The average yield across 10 localities in theApr-Jun 2015 quarter was 2.79% whichrepresents 9% increment over yields in thesame quarter in 2014. Analysis of localitieswith historic data shows almost all localitieswitnessing an increase in rental yieldsbetween 2014 and 2015

l The Yield Meter shows the returns over thepast 3 years. Yield is the percentage ofcapital and annual rental values. If a house isbought for a value X and receives an annualrental return of Y, then the ratio of Y to Xclassifies the yield. For calculation, themaintenance and other costs are not taken

4.00%

3.50%

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00Kharadi Baner Wakad Wagholi Viman Hadapsar Kalyani Magarpatta NIBM Balewadi

Nagar

2 0 1 3 l o c a l i t i e s

2015 2014 2013

l Baner Road l Aundhl Pimple Saudagar l KothrudlWanowrie l NIBM Roadl Bibwewadi l BavdhanlWarje lWanwadil Sopan Baug


Capital Values – Locality WiseAverage Listed Residential Apartment Prices

Akurdi 5160 to 6290

Ambegaon 4570 to 5760

Ambegaon Budruk 4660 to 5920

Aundh 8040 to 10090

Balewadi 6220 to 7310

Baner 6620 to 8190

Baner - Pashan Link Road 6850 to 8290

Baner Road 6580 to 8120

Bavdhan 6160 to 7420

Bhugaon 5160 to 6090

Bibwewadi 6630 to 8340

Boat Club Road 14680 to 19280

BT Kawade Road 6270 to 7770

Camp 7520 to 9930

Chakan 3020 to 3730

Chikhali 4000 to 4690

Dhanori 4610 to 5640

Dhayari 4900 to 6090

Dighi 4050 to 4910

Erandwane 11880 to 15140

Hadapsar 5220 to 6990

Hinjewadi 5290 to 6480

Kalyani Nagar 8370 to 10940

Karve Nagar 7920 to 10060

Kaspate Vasti 5860 to 6790

Katraj 4930 to 6340

Katraj Kondhwa Road 4780 to 5680

Keshav Nagar 5110 to 6220

Kharadi 5740 to 6990

Kondhwa 4920 to 6090

Koregaon Park 10240 to 13630

Kothrud 8410 to 10800

Lohegaon 4390 to 5360

Magarpatta City 7100 to 8670

Manjri 4650 to 5640

Model Colony 13560 to 17050

Mohammedwadi 4830 to 5980

Moshi 3850 to 4820

Mundhwa 4910 to 6230

Nagar Road 5020 to 6590

Narhe 4480 to 5430

NIBM Annexe 5000 to 6290

NIBM Road 5710 to 6990

Pashan 6520 to 7920

Pashan-Sus Road 6360 to 7770

Paud Road 5890 to 8630

Pimple Gurav 5840 to 7080

Pimple Nilakh 6340 to 7570

Pimple Saudagar 6240 to 7320

Pimpri Chinchwad 5130 to 6370

Pisoli 3980 to 4680

Prabhat Road 15860 to 18980

Punawale 4880 to 5760

Rahatni 5400 to 6430

Ravet 5040 to 6130

Salisbury Park 10430 to 14200

Salunkhe Vihar 5850 to 7040

Shastri Nagar 7200 to 8950

Sinhgad Road 5720 to 7420

Sopan Baug 9230 to 11420

Talegaon Dabhade 3400 to 4070

Tathawade 5560 to 6370

Thergaon 5460 to 6390

Tingre Nagar 4790 to 6230

Undri 4500 to 5570

Viman Nagar 6950 to 8550

Vishrantwadi 5350 to 6880

Wadgaon Sheri 5860 to 7530

Wagholi 4130 to 5050

Wakad 5740 to 6820

Wanwadi 6780 to 8950

Warje 6040 to 7470

Locality Capital Values (Rs/Sq feet)

Locality Capital Values (Rs/Sq feet)

PUNE

VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

D I S C L A I M E R

Every effort has been made to make this Index as complete and as accurate as possible. MagicBricks accepts no responsibility for inaccuracies inthe information/data contained in this book. It shall have neither liability nor responsibility to any person or entity with respect to any loss ordamage caused, or alleged to have been caused, directly or indirectly, by the information contained in this book. The information/data in this

book is subject to change from time to time due to market condition.

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PUNE VOL5, ISSUE 1; APR-JUN, FY 2015-16propindex.magicbricks.com

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