Realty prices up in Pune

Real estate developers in Pune have decided to increase the per square foot (sft) charges for residential construction by Rs 50 to Rs 400.

The developers have attributed this hike to the increase in prices of steel and cement along with the revised development and premium charges levied by the Pune Municipal Corporation (PMC).

Promoters and Builders Association of Pune (PBAP) president Lalitkumar Jain said the increasing cost of construction and heavy taxation by PMC had forced developers to increase the construction charges with effect from April 20.

Pune, over last two years, has experienced a sudden boom in the real estate industry. Six million sft of commercial office space for the IT industry was created last year generating jobs for over 60,000.

Apart from this, there has been extensive recruitment in industrial areas like Ranjangaon, Pirangut, Chakan and Talegaon, which created close to 25,000 new jobs. The services and retail sector too recruited over 25,000 employees last year. In all, while over 100,000 new job seekers were added to the city, the builders could develop only 35,000 new flats in the region.

"There is a huge supply-demand gap in the real estate industry, which has led to a sudden rise in prices over the last two years. In addition, steel prices have gone up from Rs 32,000 per tonne to Rs 52,000 per tonne while cement prices have been increasing consistently. The PMC too has increased the development and premium charges for residential projects from 200 per cent to 400 per cent," Jain, owner of Kumar Builders, told the media.

PBAP, which represents more than 80 per cent of Pune's real estate developers, has come out with a report that suggests ways to tackle this price hike.

The report urges the Centre to take cost-cutting measures for cement and steel prices besides suggesting that the PMC and Pune district administration develop civic infrastructure so that a large number of unused residential sites could be developed. Labour migration due to recent political agitations has also been mentioned as a problem.