“Unlike some time ago, builders have stopped increasing their prices every other week, which is an indication that sales are not happening. Some of them are offering sops and freebies. They are offering to pay for the stamp duty registration or giving the buyer a free air-conditioner or pre-furnished apartments. These practices are not yet rampant, but they have started,” said Sonal Modi general manager (Maharashtra), Housing Development Finance Corporation Limited (HDFC).

Coupled with middle class reluctance, investor sluggishness too has been a dampener on the city real estate market.

While HDFC has not reported a de-growth in its home loan portfolio, BHW Home Finance Limited officials said that there had been a drop of about 10-15 per cent in its portfolio. For Pune, 1996 was a watershed year, when the realty prices plummeted to incredible lows after a period of growth.

HDFC officials here do not see history repeating in that sense — while there will be some sort of correction, it will not be as drastic as 1996, simply because Pune real estate market is driven by the end user, they said.

“Nobody can deny that there is a definite slowdown in the Pune real estate market,” she said. Modi said the market sentiments were low, despite strong fundamentals in the city with migration and economic growth continuing to fuel demand. “But what we are seeing now are the first signs of a kind of easing out in the market,” Modi said.

Officers at the HDFC said that in Pune, people are not buying because property is not affordable. Unlike other markets like Gurgaon, Delhi or Mumbai, Pune is not as much investor driven. The city real estate market has seen growth because of automobile and manufacturing sectors doing well, besides IT. “But customers are waiting and watching and expecting a certain rationalisation of prices in the city,” Modi said.

Earlier, developers would close bookings after a certain period and wait for the prices to rise. “Now, there are so many big launches across the city. This was not so before, as builders were not required to try very hard to sell flats,” officials said.

Even if investors - some stock market players, some looking at second or third homes as investment — are only a small segment in the Pune property market, they have taken a hit as well. “Some investors have told me that they have been forced to cancel bookings because they did not make as much profit as was expected in the markets,” said city builder Aniruddha Deshpande.

More than the stock markets, it is the capital gain tax that has thrown a spanner on investors’ real estate plans, said property consultant Maj (retd) Mathew Oommen. “Because of the spike in price, investors have seen their property value increase tremendously. They are pegging what was worth only around Rs 25-30 lakh some time ago at Rs 60-70 lakh now. They cannot accept the entire money in white, as then they will have to pay a capital gain tax of 33 per cent. But buyers depend on banks to finance their homes; they cannot pay half the sum in black. Because of this, sales are not happening,” Oommen said.