People in Pune are willing to invest considerably in their children's education, and this includes a willingness to pay more for a home located close to a good school or college.
Jawaharlal Nehru named Pune the Oxford of the East, and this title is more than well-deserved on account of the many schools, colleges and management institutes that the city boasts of. Each year, Pune attracts tens of thousands of students not only from India but all over the world.
A lesser-known fact is that Pune's real estate market is a direct beneficiary of its highly developed educational environment. People in Pune are willing to invest considerably in their children's education, and this includes a willingness to pay more for a home located close to a good school or college. In fact, if we study the check-lists of features that most homebuyers in Pune consider important, more than 35% list proximity to good schools and colleges non-negotiable.
Also most of the migrants from other states generally fall in love with Pune and settle here. This also leads to demand for more houses near the proximity of the schools as this is a most logical step for anyone to raise a family.
Not only that, but a significant number of homebuyers - predominantly young working couples - are willing to compromise on other aspects such as proximity to entertainment and even workplaces in order to secure a home close to a good school. For these people, the welfare of their children ranks higher than their own convenience. What is even more interesting is that not all of these homebuyers are married or have children. Why do such buyers consider proximity to good educational institutions important while selecting a property?
The answer is as simple as it is profound. On the one hand, married homebuyers with children are definitely interested in quality schools and colleges because of the educational opportunities they offer. Such homebuyers have either just starting a family or are planning to do so soon. Either way, they are considering the future of their children and are even ready to pay more for smaller homes in order to secure their chances of a good education. In the larger context, however, most property buyers and investors in Pune understand that the availability of good schools in a neighborhood contributes directly to the overall value of the locality's real estate.
Obviously, Pune's educational districts rank very high as property investment destinations. This is underscored by another very interesting fact - namely, the resilience of the property values in areas of Pune which are close to the good schools, colleges and management institutions. In the past, these areas did not see any drop in property prices even when other localities were seeing price corrections.
Historically, homebuyers focused on these areas of Pune were willing to make all kinds of compromises in order to secure the education advantage. They were ready to settle for smaller homes in projects without clubhouses and swimming pools, in congested areas without malls or any kind of organized shopping nearby. Over time, these constraints have given way to some extent. Developers who were able to secure redevelopment rights in some of the core areas of the city were able to build more modern residential complexes which have a decent share of lifestyle amenities.
While examining the correlation of Pune's educational institutions and the property pricing in the areas around them, some may argue that good schools and colleges have led to the higher appreciation of these areas. The rationale would appear sound - homebuyers in Pune will always prefer residential projects located near an educational district and are ready to pay higher rates for them. So have Pune's good schools, in fact, helped drive up the property prices in these localities?
Maybe so, but this is an incomplete argument at best. The fact remains these areas are also defined by higher historic affluence and that this affluence has triggered the development of high-quality schools there. There is no doubt that in Pune, the best schools and colleges are in localities defined by a higher standard of living.
In the final analysis, what perhaps matters most from a property market perspective is not the nature of the relationship between education and property values in Pune, but the simple fact that the relationship definitely exists. Developers with projects in and around Pune's educational institutions are able to ask for higher prices, and homebuyers are generally willing to pay them.
About The Author:
Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.