For 3 years 6.5 % floating interest rate on home loan from HDFC!
OR
Discount on property rates - Rs. 200 per sq.ft. off!
Increasing your eligibility to sell high budget property!
As any 'reputed builder' in Pune, Belavalkar Housing assumes that "home loan interest rate" prevents you from buying property.By this offer, for the first 3 years, Belvalkar Housing is going to bare 3% interest rate on your home loan.
At 6.5 per cent interest rate you have to pay only Rs. 714 for per lakh.
Because of the lower amount of EMI, you will be eligible to get more home loan.
Because you are getting more home loan, you will be happy to pay "high" property rates of Belvalkar's Solacia at Wagholi:
Rs. 2,450 per sq. ft. for flats.
Rs. 2,600 per sq.ft. for row houses.
Rs. 2,700 per sq.ft. for twin bungalows.
Rs. 2,800 per sq.ft. for Independent Bungalows
Besides "high" property rates, their properties are comparatively "big" in sizes. But Belvalkar Housing assumes that "low home loan interest rate" can bring their "high" budget properties "within your budget" and you will book all before 30th of April!
See the budgets at Belvalkar's Solacia at Wagholi:
2 bhk flat: 978 sq.ft.: 27 lakh
2.5 bhk flat: 1,104 sq.ft.: 30.2 lakh
Row House: 2015 - 2393 sq.ft.: 58.7 - 68.7 lakh
Twin Bungalows in Cluster: 2008 - 2071 sq.ft.: 60.5 - 62.3 lakh
Twin Bungalows - C type: 2,378 - 2,433 sq.ft.: 73.6 - 75 lakh
Belvalkar Housing assumes that "less EMI and more home loan" or "200 rupees discount on the current property rates" will motivate you to book their properties and they will get "cheap finance" to complete their project which was planned when there was a boom in Pune real estate market.
Widows of Pune real estate boom!
Now, we are going to come across many offers by the projects which i would like to call as "widows of Pune real estate boom"!Today, after the global financial crises, when Indian economy is in recession and Pune real estate bubble has busted, these projects have no "market", not enough buyers.
Over hyped integrated townships are becoming "widows" because of the "cancellations of bookings". Small projects are becoming "widows" because there not enough property buyers to take them.
Some of these projects might not be able to change their planning, pricing and product mix and "get married" with the suitable property buyer!
For example, see what Saarrthi Group did on "Gudi Padwa". They scrapped "saarrthi aavyakul" - a piece of paradise near Eklavaya College, Kothrud, Pune, launched at the property rate of Rs. 4,399 per sq.ft. (only on the day of launch) and Rs. 4,600 per sq.ft. (from the next day of the launch). And re-launched it as "Saarrthi Shilp" - Creation of Art (!), at the property rate of Rs. 3,350 per sq.ft.!
Builders and property buyers sail in the same boat!
It's difficult to accept, i know, but it may be real estate boom or bust, property buyer and builder sail in the same boat. At least you can agree with me that when real estate bubble busts both suffer equally. Builders can't complete the project and property buyers don't get good homes.
For example, row houses, twin bungalows and independent bungalows in Belvalkar's Solacia are well designed. Layout of the project is good. Solacia has a good size, 27 acres, and would become good neighborhood on completion. Location is also good, you can see Panchshil's Eon IT Park of Kharadi from the terrace of your row house.
What is not good is the property rate and budget. Belvalkar Housing's previous initiative of offering "Rate Guarantee Promise" or the current offer of discount of Rs. 200 per sq.ft. or sharing 3% interest rates is not enough to get your booking.
What is not good, is the under ground parking system. Crazy idea, an effect of Pune real estate boom!
Impractical, expensive and inhuman parking system!
I think, Belvalkar Housing wanted to add some "X factor" to Solacia. So they decided to create Solacia as a "vehicle traffic free zone". They planned under ground tunnel for your car. If you see their "basement plan", at the main entrance of the township, you drive down in this tunnel and stop under your row house or twin bungalow. Park your car and climb up the staircase into your home!
Belvalkar Housing thought this under ground traffic will "reduce noise and air pollution level and keep atmosphere serene and healthy" over the ground, means in Solacia! I think this is as crazy as installing bum washers with electronic sensors in the toilets of low budget homes to save water!
Car parked in the porch of your home or a bungalow with attached garage is an ultimate dream of the property buyer. You go for the row house or twin bungalow because along with the garden in the front and in the back yard, it fulfills your fantasy of a traditional complete home. But this under ground driving and parking for the twin bungalows and row houses looks quite contradictory to your traditional idea of a "home", as contradictory as a bride wearing Low Skinny 531™ Levis Jeans!
Not only conceptually and practically, this "under ground vehicle movement" has become a big financial liability for the property buyer. Solacia is charging heavily for parking. For Row houses and twin bungalows in cluster, parking charges are Rs. 2,75,000. For C type Twin Bungalows and Independent Bungalows, parking charges are Rs. 5,50,000! Where as for a row house and twin bungalow there are no separate parking charges!!
Belvalkar's Solacia's under ground tunnel is going to become a historical monument of Pune real estate boom!
Now, you are not a property buyer but builder's financier!
Why "now", you were always funding builders to construct their projects!Booking a flat when project is just launched and paying advance disbursement of your entire loan (ADF) or paying in installments - as per the progress of the work - is not "buying a property" but "funding a builder".
However, you didn't mind much about your money and never bothered to ask anything in return from the builder.
But now, real estate market has changed. Eight - nine months ago, when Palash 2.0 launched their "Green Umbrella" scheme, we all were worried about advance disbursement of the entire loan amount (ADF). Now, even paying "booking amount" has become risky! Who knows whether the builder would be able to refund it or not!
Though the project is good, for example - Belvalkar's Solacia at Wagholi, as a financier your risk is increased. Without support of the people like you, builders would not be able to complete their projects. Today, there are very few people like you who can afford to finance medium or high value property. So, each of you should get a better deal from the builder.
Only reducing the property rate or home loan interest rate is not enough. You should get an assurance of completion of the project in time.
When Pune real estate market was booming, you were expecting good appreciation for your property. Today while booking in an under construction project, you know that you are not going to get any appreciation for your property. In fact, the same property may be available at the lesser rate when it will be 'ready possession' down the line. So, if you are not getting good returns on your investment, as good as any venture fund gets, along with the proper security, why should you bother to book today?
You should get a better deal than Mont Vert's "Rent Today Own Tomorrow". Because Mont Vert only offered security against not completion of the project and reducing property rates.
Here, we are financing the construction too! When i say here, i do not mean only at Belvalkar's Solacia at Wagholi, i mean in any under construction project in Pune real estate market.
We, the property buyers, must remember that, today, we are the builders' only financiers and we must get good returns and proper security for our finance!
Or builders are welcome to call us 'to purchase the property' when it is ready for possession!
What say you? Please, share your views in the comments. (Comments Policy),
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like your metaphors here Ravi! :)
ReplyDeletethanks gaurav!
ReplyDeleteNow this is what I call a balanced article. Good read and I think this shows to a potential buyer like me that, I can wait for the rates to get to the non-hyped levels. If a property in Kothrud near Eklavya college is down to 3300, then there's not need to pay same rate in Pashan or Baner, especially for under construction projects.
ReplyDeleteI dont think it's a good idea to finance your builder because that's equivalent to a blasphemy. but if someone thinks that its a good idea then, I think the buyer will be in a position to add the penalty clauses in the agreement, which was not the case in boom time.
It feels good to be in the driver's seat sometimes.
Ravi,
ReplyDeleteI am eagerly waiting for Lalit Kumar jain and the PBAP gang to announce Pune Real Estate price hike by at least 400 to 500 this year too on the auspicious occassion of Gudi Padwa.
Is there any luck?
"Belvalkar's Solacia's under ground tunnel is going to become a historical monument of Pune real estate boom!"
ReplyDeleteThat was hilarious! I totally agree with you Ravi. A bungalow can never be complete without a front-yard, a back-yard, trees and a car parked "on" your property.
i love the place...:)
ReplyDelete- ledz -
Ravi, very nice article. Very well written regarding buyer behaviour as well as what the point of view builder's should have. It becomes veru difficult to book flat in under construction property because there is high possibilty of cancellation & no refund of booking amount. Even reality major DLF is unable to return money, how pune builder can return.
ReplyDeleteThanks again Ravi.
Ravi,
ReplyDeleteYour efforst are apreciated to keep us informed on the Pune real estate development.
Saraathi Avyakul is not far from where I stay and last year when I visited them, it did feel as a overvalued investment. Looking at Pune properties from a cashflow perspective, what do you think about it? I think we still need some correction as cashflows don't justify prices (afterall a cashflow should decide the value of a property for saner investors).
Nice article. I visited the Solacia site today and I thought the rates are bloated beyond imagination. Wagholi is some 8 KMs from Viman Nagar. The area is outside corporation. No water drinking water supply. I liked the construction and the space. But then the propperty should be worth 40-45 lakhs worth rather than 60+ lakhs they are quoting currenly. They promise to give the possession by June 2010. The pricing: 275000 for parking (for row houses. What do you think should be a realistic price for the row houses?
ReplyDelete# Ref: "What do you think should be a realistic price for the row houses?"
ReplyDeleteIn an urban real estate market, flat is a practical utility oriented product, whereas Row House is basically a "sentimental product". How can you expect it to be priced rationally?
Ravi,
ReplyDeleteIn US, your car is usually parked inside your garage.
If you are living in a newly built apt complex, car is parked under ground.
So I do not buy your argument about the parking.
It could be that punekars are unfamiliar with this concept. But it shouldn't stop you from buying the house.
Anyways, do you think there is a chance that the prices in general will go down in third or fourth quarter?
Thanks,
Thanks for buying my argument! Look what we have here - a 5 acre bungalow project which has a under ground parking like a newly built apartment complex!
ReplyDeleteHow can talk about "prices going down further" when property rates are going up!
I see a big confusion about every thing!
Hi Friends,
ReplyDeleteIn Solacia project I want to inform that builder is giving wrong blue print of flat F Type.He is promising 2BHK in F type flat but blue print shows 1 bhk and one bedroom as kitchen.Also When I asked builder to provide correct plan ,he is denying for that.
So please be aware while booking flat in solacia wagholi project.
I don't want you people to be victim like me.I facing problem in loan and all now due to this .
Considering the under developed area of Wagholi, rate should not be more than 2200 to 2400 per sq.ft.
ReplyDelete