Hinjewadi First - The Last Straw!
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| Hinjewadi First - Because we deserve it |
In the last couple of days, when no one asked me about the 'growth prospects' of Wakad and Ravet, i realized that Hinjewadi Industries Association (HIA) must have reprogrammed you all!
Now, you - IT professionals working in Hinjewadi - you have realized what you deserve.
Now, you have accepted the fact that no one - PMC / PCMC or Government of Maharashtra -on their own is going to improve the infrastructure for you.
Hinjewadi Industries Association (HIA) has programmed you all to fight for your rights. Fight for better infrastructure for Hinjewadi, as well as for Pune.
Now, you - crorepati software engineers in Hinjewadi - patrons of Pune real estate market - you are awakened!
Awakened property buyers is the last straw, which for sure, is going to break the back of Pune builders! For them reducing the property prices is the only way to survive!!
Interrogation and Analysis:
Obscene property prices, increasing home loan interest rates, exorbitant taxation had already hit the middle income group Pune property buyers. But builders in Pune were not worried. They have already stopped constructing homes for them.
Now, builders in Pune were focusing on 'higher middle income group' - the property buyers who can afford to pay Rs. 45 to 50 Lakhs for a 2 BHK Flat and Rs. 60 to 90 Lakhs for a 3 BHK Flat.
Mr. Satish Magar, president of CREADAI Pune was not the only one who believed that there are enough number of property buyers - mainly IT Professionals - who can afford to pay these property prices, taxes and EMIs.
Pune builders also believed that this chunk of prospective property buyers was dumb too! Pune builders thought that just by releasing colorful ads in the local news papers, we can trick Pune property buyers to pay not only booking amount but 20% own contribution for the projects which haven't received necessary sanctions.
For a while, banks are not ready to give project finance. Foreign Direct Investors are withdrawing or retiring. There are not enough subscribers to Initial Public Offering (IPO) at the share market. Debt ridden builders are desperately trying to sell the land parcels to generate cash. For example, Kumar Builders (Kumar Urban Development Ltd.).
It means that, for Pune builders the property buyers are the only source of funds. Interest free funds.
However, we all know that this old trick of Pune builders didn't work at all. Forget about the bookings, most of the recently launched projects in Pune, didn't even get enough site visits!
Even, the current favorite of IT Professionals working in Hinjewadi, Tropica, the blessed township at Ravet PCMC, received 'less than expected' site visits and bookings on the day of the launch, Mr. Satish Kishtikar, Marketing Manager, Om Developers, told me other day.
"If this was the initial response, then how come around 200 flats in Tropica were booked in the next 2 weeks? What is the secret of Tropica's huge success?," i asked Satish.
"Because, Tropica Ravet passed the test with flying colors!," Satish said and told me the major changes he had noticed in Pune property buyers.
1) Booking at the launch or pre-launch stage of the project - major reason for the property price rise is out of fashion.
2) HR Departments of IT companies and their associate brokers have stopped brainwashing and sending software professionals to the builders.
3) Property buyers have lost trust in the Pune real estate advertising.
4) Now, the property buyers not only ask the questions but interrogate the sales persons.
5) The IT Professionals take time to critically analyze the different offers.
6) Pune property buyers have stopped believing in the promises of proposed D. P. Roads - BRTS - flyovers - bridges.
7) Pune property buyers have started questioning the worth of the property which doesn't have minimum infrastructure - approach road, water and electricity.
8) There is no more "desperation" to own property!
9) There is no more "fear" of property price rise! As if, all property buyers have realized that if they don't book or take more time to book the property rates, actually, come down. Like, it happened last time.
10) There must be some agency which secretly rates the right time to book in a particular project! Mostly, they access the track record of the builder, evaluate the concept of the project and decide whether one should book at the launch, at 'almost ready for possession' stage or only after the project receives the 'completion certificate' from the municipal corporation!
20-28-36 Rule:
A few days ago, Milind Jhamvar, C.A., invited me for a chat with the core team of V B Associates, one of the leading DSA of HDFC Home Loans in Maharashtra.
While exchanging tips about effects of increasing home loan interest rates and out of control inflation, Milind claimed that Pune property buyer has stopped thinking about how much maximum home loan he can get!
Now, Pune property buyer has started thinking about how much maximum EMI he can afford to pay! Now, "repayment" has become more important than the "budget"!!
"Ravi Karandeekar, it's no more location...location...location! Now, 20-28-36 is the most important rule in Pune real estate market!," Milind said and suggested that i should ask one question to everyone who calls me on 919860044110 for the 3 minutes free consultation about investing in Pune real estate market.
From that day, i started asking every property buyer - "Do you have a sanction letter from housing finance company?" - "Is your home loan sanctioned by a bank?".
You know what? Majority of the property buyers had a sanction letter!
These property buyers were more concerned about the repayment than the eligibility for the home loan.
These property buyers were not searching for a 2 BHK Flat in a particular location.
These property buyers were ready to go to any project where they can get a property which will fit in 20-28-36 rule.
20 per cent own contribution.
28 per cent of gross annual income for the annual payments towards mortgage, insurance, maintenance, property taxes payment.
36 per cent of gross annual income for monthly house hold expenses and for other monthly payments like credit cards, car and other monthly installments.
Obviously, keeping in mind the increasing home loan interest rates and increasing high cost of living these property buyers are buying 35 - 36 Lakhs 2 BHK in Tropica Ravet than 45 - 50 Lakhs in Balewadi. Compact 3 BHK Flat for 45 Lakhs than 60 lakhs in Wakad. Luxurious 3 BHK Flat in 21 Story Sexy Sangria Towers in Megapolis Hinjewadi Phase 3 than in Baner.
Because, in the next 15 years, they want to maintain their standard of living, pay EMIs regularly and give best possible education to their kids.
This new "EMI Consciousness" proved that Pune builders' assumptions are completely wrong.
Pune property buyers are not dumb to buy a property at any price because they are eligible to get that much home loan.
Now, Pune property buyer is focusing on balancing his financial plan than over stretching to buy a 'dream home'.
Point is, 'awaken' - 'enlightened' - property buyer of today is more dangerous for Pune builders than the 'threatened' 'unsecured' IT Professionals of the last real estate doom.
So, don't you think that property price correction in Pune real estate market is inevitable?
Related Stories:
1) MONDAY, JUNE 13, 2011
Is Pune real estate market about to crash?
2) WEDNESDAY, JUNE 1, 2011
May 2011 - Most popular blogs on Ravi Karandeekar's Pune Real Estate Market News Blog
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Slightly off topic:
ReplyDeleteA more price conscious clientele may lead to a fall in prices at these new townships, but would the same lead to a fall in the overall real estate market? Say for example in the prices of Land?
If so would it be beyond 10 percent?
Land prices? Sorry, Guv'nor Guv. I know about property prices.
ReplyDeleteRavi, I agree with you, people are now more worried about how much they can pay rather then how much they are eligible for.
ReplyDeleteThere is no longer a desperation to buy.
You should buy when you are ready and bargain for the price that you feel is right.
In a way, this is what the government wants, bringing back prices to realistic levels through the rate hikes.
Always informative to read your blog, keep it up. Thanks.
Ravi you are right that buyers are now cautious before making any deals. I am working in IT, even i can not afford with the current high rising prices and interest rates in real estates. I am watching for market correction to happen as 25% of flats are unsold in Pune as per my survey for real estate in Pune
ReplyDeleteTo Dear Ravi,
ReplyDeleteHalf a knowledge is worst than No knowledge,
And this is what exactly suits this article & approach to write it.
1- For you information:
"Hinjewadi First" is the intiative driven by HIA for systematic planning of further growth
I am from Infosys & closely associated with this movement
HIA has been formed 5 years back & have closely followed with Govt. authorities to get things done.
It has been succesful enough,
"Hinjewadi First" is not motivated with any negative thoughts, but to have structured approach for expansion
It's not by any mean the last straw, Sorry for this..
2- Property Rates in Pune Real Estate Market Going Down?
If this is the case, Why Tropica, Megapolis, KUL, Blueridge have recently launched new buildings with higher rates..?
Although, Looking at current scnario,
Any sensible pesron will agree that, Property rates are difficult to grow inorganically from this level.
No doubt, We are heading towards a Saturation point which may be followed up with some correction as well.
However, Timely or occasional correction is necessary for secured & sustainable Long-term growth
3- Looking the current sentiments in IT crowd everyday @ Ground 0.
People would like to see some correction, however 15% correction will bring a lot of buyers back in market
Intrest rates are"roll-a-coaster" ride, It's been evident in last few years.
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My sincere advise to you,
You do nice work by writting blogs & keeping people informed about new & ongoing projects,
But, try not give any biased or incompletely known details to people over here
Hello Naimesh, thanks for the complements!
ReplyDeleteHello name, yes, you have the power to 'correct' the market!
ReplyDeleteDear Rohit,
ReplyDeleteI admire you for being closely associated with "Hinjewadi First" movement.
Yes, you are right, 'Hinjewadi First' is creating a positive impact.
Thanks for sharing your thoughts on property price correction and growth of Pune real estate market.
Thanks for sharing sentiments from ground O.
Thanks for the complements and advice.
But Ravi, can we spread some light on the main thing,
ReplyDelete1. Why did this situation arise?,
2. Why these people had to come on streets to raise their voice?,
3. Are we responsible to this situation in any way?
4. Did the non - IT group face the price hike in Pune Property, which they never thought / deserved?
Yes, Alok. Feel free to spread some light.
ReplyDeleteWhat I read ('between the lines') in this article is as below:
ReplyDeleteBuilders are charging more price for property, but "Tropica Ravet" is not
There is no sanction for any of the projects other than "Tropica Ravet"
Pune Real Estate is expecting a huge correction but you book @ "Tropica Ravet"
"Tropica Ravet" didn't received good response but still its "current favorite of IT Professionals working in Hinjewadi"
And then that nice video, says something about "Tropica Ravet"?
Good attempt, Chandan! Thanks!!
ReplyDeleteBut, in this blog reading the lines was important. The lines talk about the "awakened" "enlightened" Pune property buyers.
In other words, a buyer will be called "enlightened" and "smart" only if they book a flat in Tropica Ravet or Megapolis.
ReplyDeleteRight, Ravi?
Dear Mistral, thanks for sparing your valuable time to post a comment! I admire your sense of humor.
ReplyDeletedear ravi,can u plz throw some light on why megapolis have delayed the possession in sangaria when you mentioned in one of ur blog that the buildings are ready and ready for possession as well
ReplyDeleteDear Tushi, have you booked the flat in Sangria and haven't received the possession?
ReplyDeletehi ravi,
ReplyDeletei have booked a 2bhk flat (Rs 4000 sqft) in a proj(reputed builder) in bavdhan khurd.
Do you see this area is a worth investing at this moment for this price rate where property rates in pune may go down in near future?
m i at risk? should i hold back for some more time?
Hello Sachin, though it is - so called - an extension of Kothrud, if you consider the infrastructure and the risk of flooding, Bavdhan Khurd is not worth paying Rs. 4,000 per sq.ft.
ReplyDeleteAsk 'awakened' residents of Bavdhan Khurd who went on hunger strike!
Ask Mr. Kapil Gandhi, the builder of Grand Stand, who believes that infrastructure matters more than the 'closeness' 'distance' and being a part of Kothrud, (of course, on the other side of Mumbai Bangalore Bypass) and launched it at Rs. 3851 per sq.ft.!
Thanks ravi for your valuable suggestion and valid reason behind it.
ReplyDeleteafter reading your blog on http://ravikarandeekarsblog.blogspot.com/2010/10/kishor-developers-bhagwati-floriana-1.html
i decided to invest in bavdhan so i visited "floriana" site and visited one more scheme next to floriana which is yet to be launched by lohiajain group. i need to rethink abt this now.
by your immense property study, which area near kothrud you see as a worth investing/living?
hi ravi..no mine is Sunway but i talked to sales executive at megapolis they are sayin official possession is not being given for now and they have no reasons for the same also they say possession cld be as late as Diwali/november.
ReplyDeleteDear Tushi, Please, don't get confused. In case of difficulty, please, don't feel shy to ask someone.
ReplyDeleteDear Sachin, Warje, Bhugaon and Pirangut are better. You can choose any as per your repayment capacity.
ReplyDeleteHow do someone know that these prices are overheated or right prices ? I always draw parallel to sharemarket. Where you know based on company's growth and PE ratio, is it worth to buy or not ?
ReplyDeleteIs there any rationale similar to PE Ratio ?
Dear Ravi,
ReplyDeleteI have been following your blog every since I seriously decided to buy a property in Pune.
I would like an advise...Is it worth buying a 2BHK flat worth Rs. 45L - 56L in Wakad?
Options are Madhupushpa, Inspera, Kalpataru, Apostrophee?
Is it wise to be in Wakad?
Please advise.
Thanks in advance
RK
Dear RK, buying a flat in Wakad or in any particular area - is basically a personal preference. Choice.
ReplyDeleteI respect your right to choose and request you not to rationalize your decision.
Accept it as your emotional decision and don't seek anybody's approval. It's your life. It's your money. Have a great time!
It was nice talking to you Ravi Sir, you clarified all my doubts...
ReplyDeleteYour blog is very intresting , please keep it up!
Thanks,
Manish
Hi Ravi,
ReplyDeleteAfter almost 2 years, I am reading your blog. Sorry for this.
Let me confess first, that (Finally) I bought a flat during last deep, in May-2009 - at a good bargain price.
Now to the topic: You are well aligned with the market, buyers sentiment and builders road maps. While we have been discussing this subject since last 4 years, in fact, it is just last 6 months, that residents / non-residents of Pune realized that the linear growth in property market happened in last 10 years can not be repeated.
I will share some old memories (of 2-3 years ago) with you and your readers after sometime.
Hello Sir
ReplyDeleteI am looking for resale flat in any Peth area in Pune main city. All flatholders are quoting rate above Rs 5000/- per sq ft. Is it correct rate? and is there any chances of changes in rates due to market crash?
Dear Neelam,
ReplyDeleteFor me, who is born and brought up in Peth, yes, it's worth paying 5,000.
Sellers are mostly out of touch with the reality. You have to convince them that there expectations are unrealistic.
Welcome, Atul! Looking forward to read you...Thanks for coming back.....Right decision at the right time....Congrats! I am happy for you!!
ReplyDeleteYou are welcome, Manish!
ReplyDeleteDEAR RAVI, I AM WAITING FOR PROPERTY MARKET CRASH SO THAT A MIDDLE MAN CAN GET SOME OXYGEN, DO YOU SUPPORT ANNA HAZARE?
ReplyDeleteYou ask very tough questions, Aadity!
ReplyDeleteTRUTH IS ALWAYS TOUGH RAVI
ReplyDeleteRAVI I WILL SUGGEST HERE TO CUSTOMIZED SOLUTIONS. SEE THERE ARE SOME AREAS OF PUNE WHICH ARE STILL OUT OF FOCUS FROM BUILDERS, IN THOSE AREAS THE PLOT RATES ARE VERY REASONABLE, YOU CAN ACCOMMODATE INFORMATION OF THESE N.A. LEGAL PLOTS, YOU CAN IDENTIFY UPCOMING CONTRACTORS WHO WISH TO GET ESTABLISHED IN AN ETHICAL WAY, FORM A CONSULTANCY DIVISION, ACCOMMODATE CUSTOMERS TO CO-OPERATE WITH CONTRACTORS, i.e. 1600/- P.Sq.Ft Is a plot rate, construction cost is 1100/- p.sq.ft. FSI Considering 2.5 FSI, The plot of 10000 sq ft. can get 25000 Fsi, in which 20 flats can be bulild, Plot cost. 1.6 cr. Construction cost 2.75 cr = 4.35 cr + extra expences 15. Lks. = 45000000/20 flats = 2250000/- Its a rate for 2BHK.With 1000Sq Ft Salable area. Pay Extra fees to contractor of 1500000/- for construction. How is the idea Ravi
ReplyDeleteONE CAN GET FLAT OF 2BHK IN 25 LACKS, JUST A NEED TO ACTIVATE THE RIGHT VENTRICULAR OF BRAIN !!!!! THE SAME FLAT ARE SOLD BY BUILDERS AT THE COST OF 50 LACKS DEAR RAVI !!!!!! JAGO INDIA JAGO
ReplyDeleteWAITING FOR YOUR REPLY RAVI... YOU CAN ESTABLISH A COMMON MANS GATEWAY YOU WILL BE EXTREMELY POPULAR AND EARN A LOT !!!!!
ReplyDeleteCONSUMER EMPOWERED = COUNTRY EMPOWERED - JAI HO !
ReplyDeleteThanks for calling, Aaditya! Nice talking to you.
ReplyDelete1) I hope you will start using the search box in the right hand column to read old blogs.
2) Without bothering whether your idea is good or bad, small or big, practical or impossible, you will keep on sharing with us all.
Looking forward!
Hi Ravi,
ReplyDeleteI have booked flat in konark krish in keshv nagar with 3500 per sq. feet
Do you think its right investment?will keshav nagar improve?
Dear Ravi,
ReplyDeleteAs a matter of fact, the Pune property prices are influenced by the Navi Mumbai - Panwel prices. It is a well known fact that the prices in these neighboring cities are substantial higher.
I observe that the rate of development of infrastructure in Pimpri Chinchwad is better compared to Pune. Relatively, the property is reasonably priced by PCMC builders. However, it is true that the builders work for software professionals and not the locals (except the landlords - the so called "Bhumiputra")
Pramod Mangrulkar
Some how you made this article so long that I got lost and I still dont know what are you talking about. Anyway keep writing, you will improve with time.
ReplyDeleteThanks Ravi, you have very well illustrated the property rates in Pune.
ReplyDeleteProperty pakistan
LOL...number of people participating in this so movement were not even 10% of total IT workforce of hinjewadi. besides property rates in Pune as evident today, have not come down and will not come down until fear and greed is out of minds of common buyers(one requiring home loans)
ReplyDeleteHave any one thought about this? What?
ReplyDeleteWhen you land in Pune, you are willing to XXXXXX amount for rental as tenant, whether the apartment/flat is worth or not..
Same we have done for the property: whatever builders have asked so far we have paid that amount and who moves in Audi and Merc in Pune? We IT/Software Guys or Builders and their family members?
It's just we don't value the money which we earn slogging for 12 to 15 hrs a day; think about our parents who always invested money at right place at the right time! Just because we are in IT/Software and we are being better paid than some of the industries we tend pay the money to the builders just to own a home at a small age? is it really worth doing that?
You have the power to bring the price down.
If we all unite together in a forum and stop buying exorbitant price asked by builders then this would come down and we need not discuss so much in length here and getting nothing out of it.
Would you still drive a Merc or Audi ? How may of you?
Think over it! It's worth thinking and then implementing , the first towards success of any project! isn't it?
selling again :)
ReplyDeleteWho is selling here ?
LOL
Hello Ravi,
ReplyDeleteI want to know what is the idle rate for Wakad area,some builders quote 4500 and some are around 3600 too...Making decision to purchase home in Wakad has become tough for me...Many builders just say that all the flats are sold out ...only top floor remaining....kindly guide.
Wow, Fantastic Blog, it’s so helpful to me, and your blog is very good,I’ve learned a lot from your blog here, Keep on going, my friend, I will keep an eye on it.
ReplyDeleteReal Estate for Sale in PA
Hi Ravi,
ReplyDeleteis it possible to sell a flat before possession ?
Thanks,
Prashant
No. Prashant, you can't sell a flat before possession. Because till the builder doesn't give you possession that flat doesn't belong to you. And you can't sell which is not yours.
DeleteHello Ravi,
ReplyDeleteDo you have any updates on SAHARA Project at Dhanori, Pune. There are some gossips that they don't have yet plan sanctioned and still they have collected around 15% of the total cost. Will the investment on this project is a risk?
This comment has been removed by the author.
ReplyDeleteHi Ravi,
ReplyDeleteI read a very good line in this blog....
" For them (builders) reducing the property prices is the only way to survive!! "..
And to ask a question betweeen lines... Is that time arrived now?...
All depends upon the property buyers!
DeleteProperty prices come down only if the property buyers stop booking.
This comment has been removed by the author.
DeleteHi Ravi, very True. Depends on buyers, or situation, when they are unable to buy... but builders should not be allowed to take unfair advantage of RAT race of buyers...
DeleteAdditionally, I feel Government should step in for STRUCTURAL development like Chandigarh. Or more than that.
We (buyers) DESERVE a proper town planning. Buildings and roads are important, next preserence should be given to schools, colleges, business centers, play grounds, Hospitals, water supply and proper drainage systems (remember 26th July..). there are no sufficient play grounds for our children, that is stopping their physical and SOCIAL growth, and leading to more problems by playing on mobiles, watching TV, using more computers / internet etc.
Efforts should be done to make elected persons feel above needs and help buyers. In your words, helping Gods suns and helpers (buyers) to God's sons.... !!!
Slow down may continue till Jun, once the rain starts, the eager / race to have home in preferred location will start. People will start cash in the advantage of low rates. And thus naturally the rate hike will start again. I wish I can buy before that.
ReplyDelete