Pune is the second largest city in the state of Maharashtra after Mumbai. Over the past decade, it has emerged as one of the top destinations for property investment in the country. Several factors make real estate in Pune a smarter and more profitable investment compared to other major cities in Maharashtra like Mumbai, Nagpur, and Nashik.

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Steady Appreciation and Good Returns

Property prices in Pune have steadily appreciated over the years at a rate higher than the national average. According to data from PropTiger, residential property prices in Pune rose by 149% between 2011 to 2021. In comparison, Mumbai saw an appreciation of 115% during the same period. This steady capital appreciation makes real estate investments in Pune very rewarding for investors in the long run.

As per several reports, properties bought in Pune around 5-7 years ago have generated returns of 12-15% annually on average. Several upcoming areas like Kharadi, Wakad, and Baner have given even higher returns exceeding 20% per year due to good infrastructure development and rising demand. Such highest-appreciation yields make Pune one of the best-performing cities for real estate investment.

Ready Infrastructure and Planned Development

Unlike many other Indian cities, Pune has relatively better infrastructure in terms of roads, transportation, water supply, and amenities. The city administration has consistently focused on planned development through meticulous town planning and implementation of infrastructure projects well in advance.

All major areas are well connected by roads and public transportation like the metro and BRTS systems are further improving connectivity. Adequate water supply through a piped sewage system eliminates the problems faced in some other fast-growing cities. Reliable power and telecom networks provide the basic infrastructure needs.

The Pune Municipal Corporation (PMC) has developed an impressive 100-year development plan for the city. Important infrastructure projects like ring roads, flyovers, metro lines, and townships are being set up well before the rise in population, thus preventing congestion. This ready infrastructure with futuristic planning boosts real estate values.

Thriving Industries and Job Opportunities

Pune is one of the major industrial hubs in India, home to thousands of manufacturing and RD units of multinational companies. The city hosts a large cluster of the automobile, IT/ITeS, engineering, and pharma industries. Over 800 MNCs have set up their operations in Pune, attracting skilled workforce from across India.

This has led to abundant job opportunities, especially in the white-collar sector. Pune's daytime population vastly exceeds its official residential count due to the large influx of working professionals who commute daily. The availability of skilled workforce in turn attracts more companies to set up shop here.

This thriving industrial environment and the presence of major employers ensure a steady inflow of tenants and buyers for properties. Even during economic downturns, rental incomes, and capital values remain largely stable due to the job security of professionals in Pune.

Tax Advantages and Positive Policy Initiatives

Pune offers some of the lowest property taxes in Maharashtra, around half of what is levied in Mumbai. Along with lower registration and stamp duty charges compared to big cities, this provides significant savings for property buyers and investors.

The state government has also introduced various benefits like additional FSI for redevelopment and relaxation in flat size regulations to boost real estate. PMC focuses on expediting clearances and providing single-window facilities to real estate developers through initiatives like the Special Planning Authority.

Such a business-friendly environment has encouraged the large-scale development of townships, IT parks, and housing projects. Proactive policies keep the supply steady while the demand rises organically due to jobs, keeping prices in check.

Relatively Affordable Despite Growth

Despite being one of India's fastest-growing cities, property prices in Pune are much lower than comparable metros. The average residential rates are around 40-50% less than neighboring Mumbai. Many upscale areas have prices in the range of Rs. 6,000-10,000 per sq. ft only.

Even with the steady rise in recent years, real estate remains surprisingly affordable in Pune compared to earnings. The average apartment fits well within the budget of middle-income home buyers and investors. This maintained affordability along with high returns makes Pune very attractive for investments.

Proximity to Mumbai and Weekend Gateway

Pune's proximity to the financial and entertainment capital Mumbai at just 150km has opened up new opportunities. Many professionals now reside in Pune and commute daily to work in Mumbai, enjoying relatively affordable housing along with improved quality of life.

Others use their Pune properties as weekend homes to escape from Mumbai's crowds and congestion. This has increased liquidity in the Pune real estate market as tenants and buyers keep rotating between the two cities. Wealthy Mumbaikars also invest in Pune as a secondary home or rental investment that can be conveniently accessed on weekends.

Infrastructure projects like the Mumbai-Pune Expressway, the upcoming Mumbai-Pune hyperloop, the four-laning of Nashik road, and the upgradation of Pune airport further strengthen connectivity. This ease of access has established Pune as a favorable weekend destination as well as a convenient residential and commercial extension of Mumbai.

FAQs

Q. Is it a good time to invest in Pune's real estate market now?

A. Despite the recent slowdown due to the pandemic, experts advise that Pune remains a good long-term investment option. Prices have stabilized after some correction last year and demand is rising again with economic recovery. Investing now can enable buying property at relatively lower rates before the next upcycle begins.

Q. What are the top areas for investment returns in Pune?

A. Promising locations that offer good capital appreciation include Kharadi, Wakad, Baner, Undri, Aundh, and Kothrud. Upcoming areas like Navi Mumbai Link Road, Chandani Chowk, and Hadapsar witness robust demand as well. Western localities near Mumbai like Lonavla, Lonavala, and Kamshet are also gaining traction.

Q. What type of properties should one consider - residential or commercial?

A. Both have merits based on individual goals and risk profiles. The residential investment ensures regular rental income and capital appreciation from price rises over the years. Commercial properties like shops and offices have higher and more stable yields but require active management. Investors can consider a mix of both for balanced returns.

In summary, Pune's strong economic fundamentals, planned infrastructure growth, and relatively affordable prices compared to returns make it one of the best cities for property investment across India currently. Backed by thriving industries, good livability, and policy support, its real estate market is poised for steady appreciation over the long run.