Monday, January 26, 2009

Darode Jog opens bookings of Greenland County at Narhe Ambegaon, off Sinhagad Road at Rs.3,000 per sq.ft. in Pune Property Mahayatra Exhibition

2 bhk flat in 23.5 lakh!


27 flats booked!

Because Darode Jog Properties did not launch this project in Pune, you may feel like they are testing the market in the 'real economy' of Kolhapur. Which is less affected than 'IT economy' of Pune or Mumbai real estate market. But I don't think Darode Jog is using Kolhapurkars as gunny pigs. Because the fact is that though Darode Jog has not launched Greenland County in Pune officially, for the last couple of months they were 'soft selling' it in Pune..(!?)

At the site office of Crossover County on Sinhagad road, tentative layout and floor plans of the Nahre project are available for more than a month . Saleable area of 1.5 bhk flat (or 2 bhk as per the ad) is 716 sq.ft. (approx.) Proper 2 bhk is 874 sq.ft. (approx) and fits in the budget of 31 - 32 lakh. Budget of 3 bhk flat, approx 1250 - 1300 sq.ft. is around 43 lakh.

When Mr. Naik told me that he has booked 27 flats at Kolhapur, first thing what came to my mind was, "What would be the property rate when Greenland County will be launched in Pune?" At Ambegaon, most rationally priced flat at Kenjale Builder's Spring Meadows goes for Rs. 2,850 and 2,750 per sq.ft. Balaji Park, a small project in Ambegaon asks for Rs. 2,600 per sq.ft. Where as Amit's Bloomfield still quotes Rs. 4,200!

Is this booking at Kolhapur and other cities of Mahayatra, going to help Darode Jog to launch the Greenland County at Nahre Ambegaon at a much higher rate? I wonder!

What is your take on the property rates on Sinhagad road?

I hear lot of interesting views about the property rates on Sinhagad road in Pune.

Mayur Vankudre of Amit's Bloomfield says, "Property rates in Pune real estate market have come down only 'virtually' not actually!"

"Sinhagad road is not an IT neighborhood like Wakad and Baner. Here property rates are not going to go down any further!"

"Property rate at Darode Jog's Crossover County - possession in 6 months - Rs. 3,500 and at Greenland County -at planning stage - Rs. 3,000 per sq.ft.! Yes, generally affordable homes are more expensive!"

What is your take on the property rates on Sinhagad road? Please, share your views in the comments. (Comments Policy)

Should we keep Nanded City Pune out of this discussion? After all, it's an integrated township of 700 acres. What do you say?

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Saturday, January 24, 2009

Lavasa to set up first space-themed park by 2010

Lavasa Corporation Ltd., a subsidiary of infrastructure major Hindustan Construction Company (HCC) is gearing up to offer the country its space-themed park, complete with a space camp, an aviation camp, fun rides demonstrating weightlessness, robotics, rocketry and even scuba diving near Pune. For this, the Company recently signed an agreement with Dubai-based Space Investment Company an investment of Rs 400 crore.

The space-themed park will be named SpaceWorld, the 65-acre park will come up near Warasgaon Dam at Lavasa Hill City, near Pune.

The park will be operational in 2010. SpaceWorld India will have educational programmes prepared with inputs from representatives of National Aeronautics and Space Administration (NASA) and veteran astronauts. It will also draw upon the Dubai firm's US partner and license, the United States Space and Rocket Centre.



“As India takes giant steps with its space exploration programme, we expect SpaceWorld at Lavasa to provide a lifetime experience that will fascinate researchers, students, tourists, both adults and children alike,” said Ajit Gulabchand, Chairman, Lavasa Corp.

It will have an entertainment area for live communication with the International Space Station, and lectures by astronauts and simulation of various missions.
Travel Biz Monitor

Related Story:

Hindustan Construction Company surprises market expectations negatively with its performance in the December 2008 quarter

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Friday, January 23, 2009

Second relief package to prop up real estate sector

"The commitment from the realty sector may include lowering of prices for houses and more and more investments in affordable housing" - Urban Development Minister Mr. Jaipal Reddy

1) Reduction in interest rates from 9.25% to 7.5% for home loans up to Rs 30 lakh

2) Doubling of income tax rebate on home loan interest to Rs 3 lakh from Rs 1.5 lakh

3) Raising of income tax exemption on rentals from 30% to 50%.

4) Infrastructure status to real estate sector

The first stimulus package had left realtors unhappy. They complained that the existing stock of unsold homes cost much more than Rs 20 lakh, so that the interest rate concession on loans up to Rs 20 lakh would not help their sale.
To read more, please, visit - The Economic Times

What is your take on "commitment of the realty sector to the politician"

2009 is an election year! We all know that promises made in the elections are honored by all political leaders.

Lalit Kumar Jain, President of Promoters and Builders Association of Pune (PBAP) has already announced that, "As there is no scope to reduce the prices further, we expect the affordability factor to come from a slash in the home loan rates."

PBAP has also declared that "An affordable house according to the PBAP is a 1,500 sq ft unit, for which the buyer will be ready to pay if the interest rate come down to 7.5 per cent."

In short, now you know what is the commitment of the realty sector to the Urban Development Minister. So, question is:
"Are you ready to book an affordable 1,500 sq.ft. flat at the current property rate if home loan interest rate comes down to 7.5 % and revive the real estate sector and contribute in GDP growth of Indian economy?"
As a responsible Indian citizen, please, give your promise in the comments (Comments Policy) to the president of PBAP and Finance Minister and Prime Minister of India.

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Tuesday, January 20, 2009

Hiranandani Palace Gardens - Ahmedabad - Hirco Group launches new integrated township project in Gujarat

"Should i en-cash my investment in Kharadi?"

"Mr. Kumar, this is for you! One more safe investment opportunity with a good potential of returns and appreciation in Ahmedabad!"

Mr. Kumar, is in US and may come back after 3/4 years. In 2007, when Kumar was working in Pune, he invested in one of the biggest township at Kharadi, at the property rate of Rs. 2,500 per sq.ft.. In the next month, he is getting a possession of his 3 bhk flat.

"Should i keep the flat or sell it off?," Kumar asked me. He told me that he didn't get any appreciation in the last 2 years and, for sure, because of the recession, he can't expect any in coming 2/3 years.

Kumar is right. Today, the property rate (for the ready possession flat, after the negotiation) of his township at Kharadi, has come down to what it was in 2007!

When i asked Kumar, "Do you have any better investment option?" Kumar told me about an attractive investment option at a very rational property price in Ahmedabad. Sure, his option was really good! There was no scene in remaining invested in Pune real estate market.

"Now, what's the problem?," i asked him. Kumar said, "After 3/4 years, I wish to come back and take a job in Pune!"

Are investors running a way from Pune?

Does it means that not only corporates like Tata Motors' Nano, Hindustan Construction Company (HCC) of Lavas but individual "real estate investors" like Kumar, who book today for their future home, are forced to go away from Pune?

Niranjan Hiranandani, Chairman, Hirco Group, in this press release, is openly encouraging the "flight of investment" and inviting them "to relocate" in his project!

Are you thinking on Kumar's line and planning to protect your capital by liquidating your investments in over priced big townships in Pune? Please, share your thoughts in the comment! (Comments Policy)

Bye bye Kumar! This is for you:

Hirco Group, India’s largest residential builder and developer of prestigious mixed-use townships, is pleased to announce the launch of Hiranandani Palace Gardens, Ahmedabad.

Similar to Chennai:

The Ahmedabad project consists of mixed-use commercial and residential space. 3 million sq. ft. will be developed in the first phase. This project is similar to its projects in Chennai and Panvel which are co-invested with Hirco Plc (AIM: HRCO). The project has received approval as an IT special economic zone (IT SEZ). Hirco Developments, a Group company, will be responsible for project delivery and marketing.

Location:

Hiranandani Palace Gardens, Ahmedabad will be strategically located with easy connections to Changodar and Belwa, the two main industrial belts of Ahmedabad. The township will be in the Ahmedabad development zone which also houses the Nano factory of Tata Motors. The site is 17 kilometers from the City centre and CBD at Ashram Road. The township will comprise of mixed use residential and commercial properties together with the social infrastructure such as entertainment, shopping, clubhouse etc.

High quality real estate with world class infrastructure:

“We are very pleased to announce the launch of our next development in Ahmedabad. The project is very much in line with our strategy of building integrated townships for India’s rising and increasingly affluent middle class in well-connected suburbs of major cities. The township will be modeled on the same successful formula as our townships in Powai and elsewhere, providing high quality real estate with world class infrastructure,” commented Mr. Niranjan Hiranandani, Chairman, Hirco Group.

Mr. Hiranandani further added:
"We continue to execute our strategy, it is a ‘once in a generation’ opportunity to buy real estate in India.
The current global credit crisis has significantly impacted the Indian real estate sector not only in land prices but also other raw materials.
We also see a lot less competition in the market from small developers the flight to quality established brands like ours.
Through the latter part of 2009 and early 2010 we will see the market steadily bottom out.
We are also seeing demand from investors who are reallocating their asset portfolios and look at current values as a asset protection tool to preserve capital and fight inflation.
We continue to cautiously take advantage of these once in a generation opportunities."
Vibrant Gujarat:

Ahmedabad is the major city in the state of Gujarat – a leading industrial state in India, noted for its rapid growth and business-friendly environment. Gujarat accounts for 14% of India’s exports and 16% of investments, and the state GDP has been growing at the rate of 9%. On many indicators such as power consumption, cellular connections, car ownership Gujarat outperforms the national average by 2 to 1.

Destination Ahmedabad:

With a population of approximately 4.5 million people, Ahmedabad is the 7th largest metropolis in India. Ahmedabad has many educational institutions, the most famous of which is Indian Institute of Management, a world-class business school. The information technology industry has also developed significantly in Ahmedabad. A NASSCOM survey on the "Super Nine Indian Destinations" for IT-enabled services ranked Ahmedabad fifth among the top nine most competitive cities in the country.

Many large Indian companies, such as the Nirma Group, are headquartered in Ahmedabad. In recent years a number of foreign companies have set up facilities in Ahmedabad. Amongst them are Bosch Rexroth of Germany; Stork, Netherlands; Rollepaal, Netherlands and Johnson Pumps of Sweden. Ahmedabad is also the largest supplier of denim cloth in the country and one of the largest exporters of gems and jewelry in India.

About Hirco Group:

Hirco Group of companies includes the various operations in India and the Middle East of Hiranandani, India’s largest residential builder and leading developer of prestigious mixed-use townships for the country’s increasingly affluent middle class. Hirco’s modern, large-scale developments – combining high quality residential, commercial and retail components with green space and social and recreational facilities – are strategically located in suburban areas outside major city centres.

Hirco Developments:

Hirco Developments acts as the development manager and marketing manager for the current Development Projects of the Hirco Group.
BusinessWire

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Want a dream home? Buy it now!

"Right Time, Right Place, Right Price," says Confederation of Real Estate Developer’s Associations of India (CREDAI)

Right time!.....for whom?
For the property buyer or
for the builder?!

Are you planning to set up your dream home here?

(True, the news is about Bangalore real estate. But the theme is national!)

It’s an excellent time, because prices are down and promotions are up.

But it will help to have the cash, because loans are hard to come by in this age of recession.

Real estate developers in the Karnataka capital are bending over backwards by offering cars, some even plots, for either buying a flat or booking one.

The flip side is that many who had paid for their dream homes may have to wait a bit longer as several developers have stalled their projects for lack of funds.
To read more, please, visit - ThaIndian

What is your take on "risks in booking a flat":

RBI has increased the the risk weightage for the real estate sector a few months ago. Because of this, banks have cut down on lending to the home buyer and to the builder. Result is builders have stalled or "slow down" the construction. Not only in Bangalore, but according to PBAP, even in Pune too!

But it looks like that builders know, for sure, that the needy home buyer is ready to take a risk!

What is your take on the risks involved in booking a flat at this point of time in Pune real estate market?

Can you minimize the risk? How?

Do you know any project in Pune which is "less risky"?

Is it worth taking a risk when you know that the project may take more time to complete or the property rates or home loan interest rates may come down in next 3/4 months?

Please, share your experience and views in the comments. (Comments Policy)

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Sunday, January 18, 2009

Luxury real estate market - across major metros - takes a hit - but Koregaon Park and Bund Garden in Pune remain unaffected!

(Because, now in Pune luxurious real estate is not in above mentioned areas but in Undri, Bopodi, Bavdhan and Bhugaon!)

(SundayET and C&W should not forget that Bihar is in India. Actually, they should talk more about Bihar. Because Bihar is not at all affected by recession! In fact, automobile sales have shot up by 45 per cent, the real estate sector has been booming in the last few months even as the world is feeling the heat of the economic recession! Why? Read!)

Yes! this is not a PBAP survey report!!
This is a SundayET's and Cushman and Wakefield (C&W)survey!!!

The survey revealed that average capital values of luxury properties in posh localities across major metros have taken a dip of 10%-20% during the last three months.

Residential rental values for the same segment have also been impacted, with some locations witnessing a drop as high as 20-25%.

Take the case of Mumbai. Areas in South central Mumbai such as Altamount Road, Carmichael Road, Malabar Hill, Napeansea Road and Breach Candy have seen a drop of 7% in average capital values during the last three months.

The impact has been more visible in the rental values in these areas where a drop to the tune of 19% is being witnessed whereas locations in South Mumbai such as Colaba, Cuffe Parade, Nariman Point and Churchgate have seen a drop of 12% in rental values over the same period.

Niranjan Hiranandani, MD of Mumbai-based Hiranandani Developers feels that there has been a temporary respite in demand in this segment. "Demand has not taken a dip...it is a temporary phenomenon. There has been a drop of 10-20% in capital values for luxury buys. People are basically postponing their buying decisions and waiting for liquidity conditions to improve."

To read about luxury real estate market in Delhi, Kolkata, Bangalore, Hyderabad and Chennai, please, visit - The Economic Times

Share your views:

Let us have a meaningful conversation! I have just opened the new topic. Now, you take over. Please, express yourself. Share your experience and views in the comments. (Comments Policy)

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Saturday, January 17, 2009

‘Waiting for the market to bottom out’

"Investors need to cautious while investing their money
as there is still a lot of uncertainty about
the future upcoming projects.
Demand is not a problem in India, however affordability is.
The supply needs to be introduced at the right price points to meet the demand,
only then will the level of transactions pick up,"
Anshul Jain, CEO-India, of DTZ International Property Advisers, said in an interview to Praveen K Singh.
Excerpts:
Please, visit - IndianExpress

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Satyam fiasco restores credibility of Public sector banks


Due to the Satyam fiasco, Infosys, a rival company, decided to be extra transparent in its latest quarterly disclosure .

We learn from Infosys that it has Rs 7,419 crore in cash, of which two-thirds is in public sector banks, like State Bank of India, Punjab National Bank, Bank Of Baroda and Syndicate Bank.

SBI alone has more than Rs 2000 crore. An unintended impact of subprime is a renewed belief on the safety of public sector banks.

The great nationwide rush of deposits into public sector banks will help them increase lending to needy sectors.

Even the once reviled concept of priority sector lending is coming back. That’s the euphemism used by many sectors asking for bailouts and subsidised loans.
To read more, please, visit - Economic Crisis & Satyam Saga : Boon or Bane for India

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Indian real estate is still in denial mode and has not explored the option of cutting property prices to revive demand

Realty sector must adjust to new reality:

It is still hoping that the general decline in interest rates or the government measures would somehow miraculously revive demand and take prices to bubble levels. Much like other asset classes, the real estate boom was largely liquidity / exuberance-driven. In the financial meltdown nearly every asset has crashed to the extent of 40-50%; over 50% for shares in the case of India.

Real estate, at least the top end investment/ speculative segment, should have seen that much correction. That has clearly not been the case, as price declines in most areas have been in the range of 15-20%. While new projects are generally at lower price points, inexplicably, builders have been loath to cut prices of existing unsold stock.
To read more, please, visit - The Economic Times

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HDFC cuts home loan rates in limited offer

Effective from today - for new borrowers:
floating rate - up to Rs 30 lakh - 9.75 per cent and
above Rs 30 lakh - 10.75 per cent

So far, none of the banks have come out with special rates for home loans in the Rs 30 lakh category.

At present, State Bank of India (SBI), the country’s largest bank, offers home loans above Rs 20 lakh at 10.25 per cent and
ICICI Bank at 12.50 per cent.

Public sector banks currently offer home loans up to Rs 5 lakh at 8.5 per cent and loans between Rs 5 lakh and Rs 20 lakh at 9.25 per cent.

Taking a cue from the Reserve Bank of India’s (RBI’s) cut in key lending rates earlier this month, public sector banks had told Business Standard that they would go for another 50-75 bps cut in lending rates in the coming days.
To read more, please, visit - Business-Standard

With this cut floating rate comes down to the same level as it was in 2006 but the property rates are at around 2007 levels!

While housing finance rates have come down sharply (9.75% HDFC) real estate rates are yet to fall in most places. According to lenders at present factoring in the discounts offered by builders property rates are at around 2007 levels.
To read more, please, visit - The Economic Times

HDFC brings the interest rates to lowest level in about 3 years!

“As the cost of borrowing has come down for HDFC, we decided to pass on the benefit to our borrowers also,” HDFC Joint MD Renu Sud Karnad told PTI over phone, while adding that the lower rates should encourage more home buyers to come to the market and then the property developers to lower their prices.
To read more, please, visit - livemint

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Friday, January 16, 2009

Severe cash crunch and falling sales bring more than 450 real estate projects in Pune to a standstill - Promoters and Builders Association of Pune

Is PBAP begging for your sympathy?

"Around 450 real estate projects in Pune and surrounding localities were at a standstill since developers do not have cash in hand. Since projects are held up, more than 5,000 workers have lost jobs and a number of engineers, architects and allied workforce too have received pink slips." Rohit Gera.

No! PBAP is threatening you!!

"Be ready to face the consequences,!!"

"Next year, most of you will be homeless!,"

Builders in Pune are warning you!

Because of this "standstill" by December 2009, only 16,000 new apartments would be ready for possession in Pune while the demand is more than 50,000.

You can take it as an advance intimation of "property price hike in 2010!"

Who is responsible for "No Booking, No Cash and No construction?":

Certainly not PBAP!

Not irrationally inflated property rates in Pune!

But...
the blame game continues!

Are builders unhappy about this?

Yes, builders are very much unhappy. In search of happiness, most of them have gone to Chinese gambling enclave of Macau!

Poor fellows!! What else they could do?
To read more, please, visit - Kaustubh Kulkarni-Business-Standard

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RBI’s relaxation provides builders with an opportunity to hold on to high property rates that were quoted before the market slump

Builders, reluctant to reduce rates, keep on blaming banks for causing the market slump and lower sales volumes by charging high rates on home loans

The banking system’s plan to bail out cash-strapped housebuilders by restructuring loans to help them survive a market slump is under strain, as builders have gone back on their promise to sell properties at reduced rates, according to senior bankers.

Some bankers have complained to the central bank that after making use of the relaxed rules, which permit banks not to classify loans to real estate firms as bad loans the moment they are restructured, builders continue to hold on to artificially-inflated prices.
To read more, please, visit - The Economic Times

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Thursday, January 15, 2009

Buying a home? Some things to remember

"Once the market bottoms out, home-seekers will start making a beeline for properties and loans. If you have identified your ideal home beforehand, you will be a step ahead of others. You can jump at the earliest opportunity available — in terms of price as well as interest rates," says Ashish Shah, director, KPMG.

1) You can start quoting the price that seems reasonable to you:

Lack of buying activity means that it is a buyer’s market at the moment, and is likely to strengthen from hereon. “You can start quoting the price that seems reasonable to you.

Try quoting a price that is 50% less than the highest price a property in the locality commanded in the past,” suggests financial planner Kartik Jhaveri.

2) Finding the perfect house is nearly impossible, so go for the one that meets most of your requirements:

When you commence your house-hunting mission, it is advisable to keep a list of ‘must-have’ attributes ready.

Keep an eye on time taken to commute to school and workplace. In addition to quality of construction, evaluate the existing infrastructure — roads, water and power supply, play grounds, shops catering to day-to-day needs and so on.

Finding the perfect house is nearly impossible, but comparing shortlisted properties will help you zero in on the one that meets most of your requirements.

3) Consider old flats:

If you are not fixated on ‘ultra-modern’ amenities, you can consider buying an old flat.

If you locate a well-maintained house in the desired locality that boasts of robust ancillary infrastructure, there is no reason why it should not be considered. After all, the strain on your budget will be minimal. “The difference in prices of new and resale properties would depend on various factors, but would usually be a third less than that of a new property,” says Mr Grover.

However, a comparison between new and old houses should also cover renovation costs the latter would necessitate. Besides, if you intend to sell it in future, the resale value would have dwindled significantly.

4) Get clarity on refund:

While signing the contract, the buyer should enquire about the time frame within which the project will be completed and the penalty the builder would be liable to pay in the event of a delay.

“The builder would be legally liable to render a refund if it can be proved that he has not met his part of the contract. Such circumstances would include unreasonable delays in completing the construction, flawed construction, flawed title or evidence of previous claims on the property or the land on which it stands,” says Mr Grover.

Adds Mr Gupta: "Buyers should also enquire about the portion of advance paid that will be forfeited and the time frame within which the balance will be refunded, in case they choose to cancel the booking."
To read more, please, visit - Preeti Kulkarni-The Economic Times

Related Story:

Smart property buyer's check list

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Tuesday, January 13, 2009

Dear Raju of Hinjewadi, you can achieve immortality but you won't get refund of your booking amount by walking to Blue Ridge every other day!

You have to wait till the flat you have canceled at Blue Ridge Hinjewadi is booked by some human being or by an alien!

Dear Raju of Hinjewadi,
let me remind you that it was your wish to be human.
You had a wish "to know how it feels to feel".
You wanted "to hope, to despair, to wonder, to love."
As an android, you could have achieved immortality by not wearing out.
But you chose to become human - Raju of Hinjewadi!
Raju, as a human, to become immortal, you knew you have to keep on doing one simple thing - keep walking!
Blue Ridge Hinjewadi offered you an opportunity to walk, walk to work, so you booked a flat in 2 minutes.
But now, to get your money back you have to wait.
No! not for ever!
Just till the flat you had canceled is booked by someone.
Why?
Because, unless and until someone gives the money to the company how can they refund your booking amount!
Yes, this is the policy.
This is what Prasanna Tamaskar, Sr. Manager Sales, Flagship Infrastructure (P) Ltd, Paranjape Schemes Venture, told me.
So, stop walking!
Keep wishing!

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Monday, January 12, 2009

Dear Raju of Hinjewadi, have you sold out your second flat which you booked as an investment in Pune real estate market?

If not, read these stories of Raju of Hyderabad!

His lust for land seems to have been Ramalinga Raju's undoing.

Hailing from an agricultural family, for whom land was everything, the Satyam chairman went on to create a multi-billion empire in a span of just 20 years. This was a remarkable feat for a first generation entrepreneur but he could not overcome the lure of land. And that that led to the collapse of his empire.
To read more, please, visit - Hindustan Times

Mega land deals did Ramalinga Raju in

According to information pieced together by DNA from sources, Raju told the police that property deals had squeezed all his resources. Like any other realty player, Raju, too, joined hands with friends and relatives tobuy large chunks of real estate. - DNA Money

Budget wise unsold flats in Pune real estate market - Promoters and Builders Association of Pune - PBAP - survey report

BudgetUnsold Flats
up to 25 lakh61 per cent
25 to 40 lakh
50 per cent
40 to 60 lakh
30 per cent
 above 60 lakh
31 per cent 

To read more, please, visit - SakaalTimes

Related Stories:

1) Property rates in Pune real estate market

2) Who is responsible for the unaffordable rates of residential and commercial properties in Pune?

3) Wait for 6 more months - Promoters and Builders Association of Pune tells you not to book now!

4) Location wise - unsold flats in Pune real estate market

Sunday, January 11, 2009

Location wise - unsold flats in Pune real estate market

Thanks to Promoters and Builders Association of Pune (PBAP) for publishing this survey report of 458 ongoing projects!

This data will help home buyers to negotiate property rates with your members!!








Location ProjectsUnsold Flats
Undri, Manjri, Hadapsar, Fatimanagar, Wanowrie, Kondhwa and Katraj
 78  41
per cent

Pimple-Nilakh, Aundh, Baner, Pashan, Balewadi, Wakad, Pimple Saudagar, PCMC and Hinjewadi
186
47
per cent

Vimannagar, Vishrantwadi, Wagholi, Wadgaonsheri, Kharadi, Kalyaninagar, Boat club/Koregaon Park, Mundhwa, Magarpatta, Sopanbaugh and City area
110
34
per cent

Kothrud, Erandwane, Warje, Sinhgad road, Bavdhan, and Hingne
 110 
49
per cent




To read more, please, visit - SakaalTimes

Saturday, January 10, 2009

Wait for 6 more months - Promoters and Builders Association of Pune tells you not to book now!

Take off point or Tip off point for Pune real estate market?

On Friday, to cheer up the property buyers who are sitting on the fence, waiting for the property prices and home loan interest rates to come down, Promoters and Builders Association of Pune (PBAP) gave a good news!

PBAP president Lalit Kumar Jain told the media that "In a few months interest rates would come down to around 7.5 per cent!" He also added that "It will be the take off point for the city's realty sector once again."

It means, now PBAP is also convinced that there is some sense in not booking a flat at this point of time and suggests you to buy a property after a few more months when interest rates come down!

Few means 6 months!

PBAP is giving you this tip because each and every member cares for Pune property buyer. And every builder is as anxious as the home buyer to find out when the wait is going to end and when (flat) booking will resume in full swing.

One of my source, has told me that this claim about interest rate is not only a motivational slogan but it is based on the solid prediction of nun other than CEO and Managing Director of ICICI Bank Mr. K V Kamath! Mr. Kamath has declared that "interest rates are set to fall by up to five percentage points in the next six months as inflation is moving towards zero level.
"All I can say is that four-to-five percentage points correction in interest rates from where it is today...this correction, I think, will be by July...this is where the interest rates are tending in six months from now," Kamath said in an interview.
But the credit for jumping to the conclusion that "low interest rate would be a take off point for Pune real estate" goes to PBAP! Because, actually in the same interview Mr. K V Kamath has warned us about the impending "deflation"! Mr. Kamath says:
"Interestingly, we are heading towards deflation that is very clear, or rather we are heading towards very low level of inflation...
Those who understand little bit of Economics and Finance will tell you that it would be a tip off point and not take off point!

Deflation: a declining spiral:

In simple terms "deflation" is totally opposite of "inflation".

In 'inflation' we have to pay more amount of money to buy a flat or a thing.

In 'deflation' we have to pay less money to buy a property or anything!

It means rate of the property along with the profits of the builder goes down.

Let me quote Colin Asher, an economist at Nomura Securities. He told Radio Free Europe that the problem with deflation is that:
"In deflation, there's a declining spiral. Businesses make less profits so they cut back on employment. People feel less like spending money. Businesses then don't make any profits and everything works itself into a declining spiral.

Deflation also has a psychological element as it becomes rooted in peoples' psychologies and becomes self-perpetuating.

Consumers are discouraged from buying expensive items like automobiles or homes because they know those things will be cheaper in the future."

What is your take on waiting for 6 more months?

Atul, who's comments you must be reading on this blog, i am sure, will say, "i am telling this for last couple of months!" Yes, i accept, i found it very difficult to agree with him.

Even now, i find it difficult to understand why the leader of more than 300 big and small builders in Pune, Mr. Lalit Kumar Jain is not encouraging property buyers to book a home when things are going exactly as Mark Gongloff (CNN Money) describes! He says:
"when prices fall simply because people have no desire to buy -- leading to a vicious cycle of consumers postponing spending because they believe prices will fall further -- then businesses can't make a profit or pay off their debts, leading them to cut production and workers, leading to lower demand for goods, which leads to even lower prices."
What is your take on postponing booking a flat for 6 more months and waiting for property rates and home loan interest rates to come down as Mr. Lalit Kumar Jain suggests? Please, share your views in the comments. (Comments Policy)

Related Stories:

1) Planning a home buy? Do it in first 3 months of 2009

2) Not Rock-Bottom for property buyers in (Pune) city - Ritu Goyal Harish

3) Banks begin to revalue properties as prices fall

4) "What is come first egg or hen.?"

5) Property rates in Pune real estate market

6) Smart property buyer's check list

7) Who is responsible for the unaffordable rates of residential and commercial properties in Pune?

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Who is responsible for the unaffordable rates of residential and commercial properties in Pune?

Thanks to Promoters and Builders Association of Pune (PBAP) president and chairman of Kumar Builders Lalitkumar Jain for revealing the truth!

Important questions you should ask while negotiating the property rates:

Oh! PBAP is giving us important points which we could use while negotiating property rates!

Till recently, we thought, property rates are driven by the demand and supply rule. PBPA tells us it is not so. There is some logic and rational reasoning behind property rates and PBAP tries to justify the per sq. ft. real estate price by giving bifurcation. Now, it is our duty to ask specific questions and get ourselves satisfied that the quoted property rate is totally rational and rock bottom!

For example - if the salesman says "property rate is Rs. 3,000 per sq.ft." then you should ask him "OK. Out of Rs.3000, how much you are charging for the state government's stamp duty on development agreement between you and the landlord?"

Mr. Lalit Kumar Jain tells us that per sq.ft. Rs. 400 go to various charges levied by the state government, PMC and centre. Now, it's your duty to ask how much goes under each head to the respective authority and ask the builder to show the necessary document or proof.

In short, PBAP says days of "property rate + parking charges + amenities charges (or club membership or infrastructure charges) + MSEB charges + society formation + legal charges + stamp duty + registration charges" are over. Now, there is more transparency. You have the right to know the details of "per sq.ft. property rate"!

Property buyers in Pune real estate market, if you do not ask these questions, remember only you are responsible for paying unreasonable property rates and PBAP would not feel shy to announce this in the press conference!
To read more, please, visit - PBAP demands cut in stamp duty, opposes ready reckoner rates

Smart property buyer's check list:

I think we should start making a list of important points we should consider while booking a flat and a list of questions we should ask to the builder while negotiating the property rate. Please, share your points and questions in the comments and make this conversation more useful for the property buyers in Pune. (Comments Policy)

Related Story:

Property rates in Pune real estate market

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Friday, January 9, 2009

Smart property buyer's check list

In such uncertain times, when any real estate company could go bust one must live with caution. Here is a checklist:

1) Stick to reputed builders

2) Opt for developed properties rather than ‘to be developed’

3) In case of latter, check the number of properties that are currently incomplete

4) Several ‘to be developed’ structures do not have proper documents and/or clearance

5) Don’t bite the ‘freebies’ bait

6) Ask for penalty clause in case of delays: Developers are providing fancy timelines of project completion in 2 years or less
Townships don’t develop in 2-3 years

7) Ask for cancellation policy

8) Ask for re-sale policy

8) Stick to prime areas

9) Rates of ‘next-best’ options will fall faster

10) Go for homes which you can afford over your earning career

11) Bargain, bargain, bargain – remember the builder needs your money

12) Stick to city limits

13) Go for fixed interest loans (if your banks agree to provide you)

14) Get a term insurance for yourself (or the home loan will become a liability in case something goes wrong with you).
To read more, please, visit Realty Gets Real

15) Please, add your points in the comments!

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4) Ravi Karandeekar's Pune Real Estate Blog

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Thursday, January 8, 2009

Property rates in Pune real estate market

1) According to Promoters and Builders Association of Pune (PBAP)

"I had personally written to all members of PBAP to sell apartments at the lowest possible rates and they have responded positively. The properties are being sold at affordable prices to customers and prices have been lowered up to 30 per cent," Lalitkumar Jain, President, PBAP, said.

2) According to real estate agents in Pune:

"There was no formal reduction of rates but builders were open for bargaining. Even then, there is no response from the potential buyers and this has resulted in almost no deals taking place for a few months now,” Maj Mathew Oommen, a real estate consultant, said.
To read more, please, visit - Express India

3) According to Ritu Goyal Harish in DNA:

The real estate market in the country has dipped, but city builders say a Rs100-Rs200 fall is not indicative of a slowdown. It is part of the business policy!
Not Rock-Bottom for property buyers in (Pune) city

4) According to Mr. Anonymous:

there are 3 types of projects:
1. Alomost Complete:
Almost 80%-90% are already sold, as these projects were launched when market was booming. Builders have already invested huge money in buying land and big construction cost. These builders are not ready to reduce prices by much. Don't expect more than 10% correction here.

2. The project started in Last year, and those will complete in year or two (God knows..) (20% complete):
These project were launched, when marketr was booming, but within few months reverse trend started. Only 10%-20% flats are sold. These projects does not come in affordable housing catagory, as they were launched 1 year back (market was not that bad). You can expect 15%-25% correction in those.

3. New Projects:
Mostly they are of 'affordable housing' catageroy (less quality???). They are launched with reduced prices by 15%-25%.

Now, what is the benchmark to say the priced are somewhat reduced. So, we need to see the average prices at same location when market was at peak.
Planning a home buy? Do it in first 3 months of 2009

5) What is your take on rate cuts in Pune real estate market?:

Real estate rates were always "negotiable"! Only difference is depending upon circumstances while quoting the rate salesman says "negotiable" or "fix rate" or "let us see".

As a real estate salesman, i believe that ultimately it depends upon how many people negotiate. Few months ago, most of the property buyers were booking without negotiating so the property rates were fix. Now, everyone negotiates, so today, property rates are negotiable.

What is your experience? How much negotiations "happened" when you booked your flat? Please, share your experiences in the comments. (Comments Policy)

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Wednesday, January 7, 2009

"What is come first egg or hen.?"

Does overall economic development stimulate the real estate or real estate stimulates the economic development?

In this world such questions r twist our minds:

An year ago, nish asked the question,"What is come first egg or hen.?" on Yahoo India Answers.

Out of 27 answers nish thought that Sherlock Holmes' answer "If you go by sequence in your question, egg.", was the best answer.

In his comment nish said "u r correcr .i ask simple Question,but people makes it complicated" and he declared that his question is resolved!

If belive God created the world, then hen comes first.

If nish had been from "Indian real estate sector", i am sure, he would have chosen the answer, "If belive God created the world, then hen comes first.", given by Smile- conquers the world.

Because, Indian real estate developers believe that they are here to complete the work of God. He created every thing, land, plants, animals, rivers and hills but homes. Builders are completing God's unfinished job by building homes and doing a great favor to human beings which otherwise would have lived in the caves or on the trees!

Considering the financial background of Indian Prime Minister, builders are not talking to him like they talk to their customers, the needy home buyers. They are talking about GDP, economy and employment to explain him what comes first, egg or hen, housing or economic development! Yes! read how Chairman of Hiranandani Developers and Chairman of Unitech are doing their best to explain the divine truth to ex-governor of RBI, International Monetary Fund (IMF) and the Asian Development Bank (ADB) and ex-finance minister Dr. Manmohan Singh!

1) Joining hands for more homes

2) Real Estate: Correct time to innovate

By the way, what is your opinion about builders role in the economic growth of the nation?

Builders are not happy.
Builders are not given proper credit for their contribution in the GDP growth.
Government do not give them the status of an "industry".
Banks find them risky and do not lend funds freely.
Housing group of IT professionals, off course, working in Hinjewadi, complains about being "exploited" by the builder lobby.
Has it ever come to your mind that builders contribute a lot in creating wealth or do you think that they only live off the wealth created by you all?
Please, share your views in the comments! (Comments Policy)

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