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.

A high migrant influx offers a robust market for rental property. The primary catalyst that has changed the face of the city is the IT sector, fostering growth especially in the western region of the city; it is now capturing the eastern region as well.

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.

Since the central region of the city has almost stretched its development potential it’s the fringes that are now being looked upon as the driving regions of the city.

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.

Hence, according to experts, investing in a residential property in a strategic location with the purpose of renting it out is becoming an excellent investment proposition.

Knight Frank India, Branch Head Shantanu Mazumder explains, The rental market in Pune is very robust. Since the prices of interest rates have risen, the figures haven’t gone up. People now prefer to stay in rental accommodation. The rent rates have not appreciated throughout the entire city but only in certain pockets where the demand is higher than supply. The Eastern part of the city has seen more increment in the rent rates as compared to the Western part where the supply is slightly on the higher side.

Gopal Gaba from Excel Realtors in Kalyani Nagar says, The rent rates in Kalyani Nagar have gone up around 15 per cent since last year. This is primarily because fresh inventory is less in the region, resulting in a gap between demand and supply. This causes the rental value to escalate .

He also adds that though people are looking for 1BHK since it suits the budget needs better, there is a shortage of 1BHK in the area. He says it is a good time to invest in the region and lease the apartments for rents since the rental values are expected to rise further in future.

B. Jamal from Classic Homes in Kalyani Nagar also agrees that the demand in the area is more than the supply mainly because new inventory isn’t much available. IT companies and BPO employees look for rented apartments in the area.

Kalyani Nagar is one of the best areas in the city to invest since the return in terms of rent is extremely high here. People who pick up houses in this area, predominantly give it out on rent. Its proximity to the airport. railway station and the new herd of malls make the area further lucrative .

The adjoining posh region of Koregaon Park is also high on demand with 10-15 per cent increment in rent rates of residential projects in the area. Koregoan Park has a high demand for 2, 3 and even 4 BHK since it is the preferred location for the creme de la creme of the city.

Vijay Sherikar of Allied Properties explains, The demand in the area is fostered by the IT, BPO population. the foreign nationals as well as the top brass of the several industries that have built their base in the city. He informs that a few projects are coming up in the area that will balance out the demand in the area.

Mazumder adds, The micro markets that are more matured and already established can demand higher rent rates with passing time. People are ready to cough up more rent for areas like Kalyani Nagar and Koregaon Park. These established areas have very few or little new offerings .

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.