Hyderabad and Pune, the two emerging IT hubs, seem strikingly different when it comes to realty prices, especially for residential houses.

Thanks to the IT boom, investments in housing have boomed in both cities over the last three years. While prices have nearly doubled in Hyderabad, they have almost stabilised in Pune, according to a recent Cushman and Wakefield report.

The reasons: real estate space within the city is limited and supply constraints have pushed up prices. With several upcoming projects in Hyderabad, the capital and rental values across micro-markets areas within the city are also likely to spurt over the next six-eight months, said an analyst.

In Pune, on the other hand, there is enough space to expand within the city. However, the demand for residential housing is higher in the peripheries like Hinjewadi compared to the city. Several IT companies have set up shop in Hinjewadi.

“The Hyderabad market is growing at a fast clip, but is also over-hyped. In Pune, most of the land in the city is owned by the defence forces, prompting others the move to the periphery,” says E Sudhir Reddy, MD, IVRCL.

The chairman of Ramky Group though has a different explanation to offer. According to him, the peripheries in Pune are a big draw for realty investors due to lower prices. He also reckons that poor infrastructure in the Pune city could also be the trigger for investors to build homes in the periphery.

Cushman and Wakefield has projected supply of land in Hyderabad at around 4.01 million sq ft by the end of this fiscal compared to 3.04 million sq ft in the same period last year. The demand last fiscal was around 3.46 million square feet last year, leaving a gap of around 0.42 million square feet.

Source from The Economic Times