Rental Property Returns in Pune:-
Real Estate market varies from place to place. Pune has a well-established end-user real estate market but there are very few real estate investors in this market. However, in the recent times, Pune has seen a lot of real estate growth and thus, a lot of people are taking an active interest in real estate here especially with the rental returns in mind.
The demand for residential property continues to rise in the city not only because of the IT sector but also the current boom of the automobile sector and service industries. A large amount of young student population migrating from different parts of the country and even abroad has further added to the requirement. Such diversified industries create a large pool of demand for rental properties.
Pune has witnessed a consistent real estate market in the last few years and continues to be one of the prime cities for residential investment. Healthy consumer demand, along with good economic drivers, has led to vigorous residential investments producing good yields.
We recently did an analysis of the rental returns in Pune market when compared to the purchase price of properties in various areas in Pune. The rental price has been calculated per square feet per month and the purchase cost has been calculated on per square feet basis.
Recent studies have shown that the city has seen an increase in residential rent price in many areas. Rental values of a 3BHK apartment in Pune indicate that the up-market locality of Kalyani Nagar has witnessed the highest appreciation in rentals of 16% in Q1-12 as compared to Q1-11. Areas like Camp, Senapati Bapat Road, Aundh and Koregaon Park have also seen increases in rental values in recent times.
Areas like Swargate and Mukund Nagar have also witnessed a slight augmentation in the rent rates. Sangram Garud of S.R Realty says, “Swargate and the surrounding regions have seen a 5-10 per cent increment in rent rates as compared to last year. The increasing facilities including malls that are coming up have led people to invest in this area. Its proximity to Market Yard, a major commercial hub and Camp, makes it a very lucrative region for investment.” He also adds that for rental purpose 1BHK is a lot more in demand in the area while the availability is comparatively much less.
Based on this analysis, Wakad seems to be doing very well in terms on rental returns when compared to investment. Other areas that seem to be doing well are Koregaon Road and Katraj. However, some of the places that seem to have poor rental returns when compared to investment are Apte Road, Model Colony and Prabhat Road, Deccan area as well as Salisbury Park.
The graph is based on the latest data collected on monthly rental income (per.sq.ft) and average price of apartments (per sq.ft).
Category : Flatons Advisors Blog