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Monday, October 24, 2011

Ravi Karandeekar, You are a fool!

Entrance of CREDAI-PUNE METRO - PROFEST WEST 2011 - Exhibition of properties in Pune West
Entrance of CREDAI-PUNE METRO - PROFEST WEST 2011 - Exhibition of properties in Pune West

Yesterday evening, I visited PROFEST WEST 2011, property exhibition organized by CREDAI-PUNE METRO at VITS Hotel, Balewadi Stadium, at Sadanand Hotel Junction of Mumbai Bangalore Bypass & Baner Mahalunge Road in Pune.

Since, it was the last weekend before Diwali, the crowd of property buyers was not 'huge'. Looking at the 'free' real estate sales persons in the stall, i decided to talk to them and understand how Pune real estate market is doing.

After visiting a couple of stalls, i realized that all real estate salespersons were trying to tell me something. Not about Pune real estate market, but about me and my blog. Of course, these people were not as "free and frank" as some of you readers are - in your comments on my Ravi Karandeekar's Pune Real Estate Market News Blog. So, i took some time to understand what they were trying to tell me. Only when I met Mr. Anil Pharande, Chairman of Pharande Spaces, at the 'exit' of the property exhibition, i understood that they all were trying to tell me - Ravi Karandeekar, You are a fool!

"Karandeekar.....look...what i have done! You wrote who will buy in this "Aadiwasi area"....but...I sold total 1,800 flats in Celestial City and Woodsville!! Accept that you were wrong!!!," tightly griping my hand, Mr. Anil Pharande said.

I was about to say that - Sir, I didn't label Ravet & Chikhali - Moshi as an Aadiwasi area! I raised question only about the timing of launch, size of the property, property rate, charging terrace 100 per cent and 30 per cent loading - but i couldn't; because, someone stopped to congratulate Mr. Pharande for organizing such a grand event.

Introducing me to him, who was a builder in PCMC, Mr. Pharande praised my blog and added that, "Only problem is, like all Punekars, Ravi also didn't know the potential of PCMC. When we launched Celestial City, I called him and gave him tuition!"

"Yes, Sir! You opened my eyes. You didn't teach me a lesson. But, gave me a tuition!," I said.

"I have created new markets. Nobody knew Ravet - Moshi - Chikhali before i launched Celestial City and Woodsville. Now, every week new projects are launched there. And all are affordable for a common-man. Aren't they?," Mr. Pharande said.

"Yes, Sir! Thanks for your teachings - without you - the world would not have understood the potential of PCMC!!," I said.

"In the days of world financial crises, we not only gave an affordable home to a common man - but good appreciation for his property too!," Mr. Pharande said.

"Yes, Sir! From 2,400 in 2009 to Rs. 3,400 per sq.ft. in 2011 - 1,000 Rupees appreciation in 2 years is awesome!," I said.

I was about to say, "Sir, you have done lot of good things for the builders too! Now, your way of affordable pricing has become a standard property pricing policy of Pune real estate market!" but Mr. Pharande gave me the parting message, "Be positive - blog the facts - provide useful information about Pune real estate market - than criticizing - Goodbye"

"Yes, Sir! I got you!!," I said and somehow managed to free my hand from his powerful clutch.

As i came out of the exhibition, i realized that I had made a big mistake. I didn't take the 'positive step'. I didn't give my best wishes to Mr. Pharande for his upcoming township in Punawale!

"Ravi Karandeekar, what did you learn today?," I asked myself. When i started preparing a random list of things i have learned in PROFEST WEST 2011, i realized that all conversations i had with my friends had some positive messages for me.

1) Being enthusiastic about upcoming projects in Pune real estate market and writing about their 'lucrative' pre-launch offers is positive blogging;

Raising questions about sanctions and approvals is negative. There isn't anything 'unethical' about launching projects without all sanctions and approvals.

Because, even if the sanctions take time and the projects don't start for a few months, ultimately, those who have booked at the pre-launch & launch offer are in profit - because they get appreciation!

The salesperson in Mont Vert Luxury Homes was trying to tell me this when he talked about the 'huge appreciation' of Mont Vert Belair at Bhugaon.

In July 2010, in the pre-launch offer, the property rate was only Rs. 2599 per sq.ft.. And today, in October 2011, the current rate of Mont Vert Belair Bhugaon is Rs. 3,799 per sq.ft.! Now, all inclusive property price of a 2 BHK Flat in Mont Vert Belair is in the range of Rs. 48.55 to 51.64 Lakhs and a 3 BHK Flat fits in the budget of Rs. 60.30 to 61.19 Lakhs.

What huge appreciation - Rs. 1,200 per sq.ft. - in such a small period of time - only 15 months! Everyone who booked in Mont Vert Belair is very happy!

Oh! God!! It was rude to say - "What is your business? Making people rich? Otherwise, you would not have launched Belair in July 2010!"

2) A 2 BHK Flat for Rs. 45 to 48 Lakhs, near Hinjewadi - at Baner- Balewadi, Wakad, & Pimple Saudagar - not a builder's offer but a property buyer's demand!

Yash Promoters & Builders' stall was at the entrance of PROFEST WEST 2011. They have launched a new project Yash Wisteria, only 2 BHK Flats near Om Developers' Island in Wakad. Carpet area of a 2 BHK Flat was around 646 or 636 sq.ft. But the terraces were quite huge - from 220 sq.ft. to 315 sq.ft.

All inclusive property price of these 2 BHK Flats in Yash Wisteria Wakad was in the range of Rs. 47.4 to 48.5 Lakhs.

"If the terraces had been little smaller - your 2 BHK Flat would have cost around 40 lakhs! Isn't it?," i asked the salesperson.

"Yes! But, then who would have bought it? Someone who's requirement is 2 BHK has a budget of 45 - 48 lakhs! Why would have he purchased a smaller flat when he can buy a big one?," the salesperson said.

"Is it so? People like to buy a 2 BHK Flat for 45 - 48 Lakhs?," i asked.

"Yes! Go and visit other stalls. Then you will understand why we are offering big terraces - max value in your budget!," the salesperson said.

As per his advice, i visited a few stalls and asked for the all inclusive property price of a 2 BHK Flat. You know what? Every builder was selling 2 BHK Flat for around Rs. 50 Lakhs.
1) Costa Rica Wakad Rs. 47.67 to 51.10 Lakhs (up to 5th floor)
2) B U Bhandari Landmarks' Alacrity Baner Rs. 52.63 & 54.07 Total Package
3) Paranjape Schemes' Vasant Vihar Towers Rs. 56.13 & 58.15 Lakhs
4) Paranjape Schemes' Yuthika Baner Rs. 57.8 to 67.6 Lakhs

When the salesperson at Midori Towers Pimple Nilakh told me that the all inclusive property prices of his ready possession 2 BHK Flat is Rs. 66 Lakhs, i asked him, "Why 66? A 2 BHK Flat always costs around Rs. 48 - 50 lakhs!"

At one stall, i asked my friend, "How come all 2 BHK Flats cost around Rs. 50 Lakhs? Isn't it too much price for a 2 BHK?"

"Sit down for a moment and i will show you why we sell a 2 BHK Flat for Rs. 50 Lakhs!," my friend said.

I pulled the chair and started gossiping. In no time, a visitor came to us and asked about the availability in my friend's project.

Looking at me, instead of asking a standard question - What is your requirement? 2 BHK or 3 BHK? - my friend asked, "What is your budget?"

"Around 45 - i can stretch it up to 48 for a 2 BHK Flat," the visitor said.

Looking at me, my friend said, "Good! I have a few flats in your budget - but if you stretch a little - only 1 or 2 Lakhs more - you can get a choice!,"

"Yes! Certainly!! I want a choice!!! Tell me what you have..," the visitor said.

My friend told his junior to look after 'the inquiry' and said, "How was the demo? Now, you know that - a 2 BHK Flat for Rs. 50 lakhs - has become a standard property price near Hinjewadi!"

"Ravi, in Pune real estate market after every 2 - 3 years "fresh blood" becomes a prospective buyer. Today's property buyer is Rs. 70 per litre buyer - he will be unhappy only if petrol price become 72 and would be happy if it comes down to 68 rupees per litre - he is not like you and me who used to buy a petrol at 25 rupees per litre! You know? In the beginning, i used to feel shy to quote 45 for a 2 BHK. But, not now? Now, i fear to quote less than 45 - because the buyer may think that my property is not that good!," my friend said.

"Come on, how many can afford 50 lakh 2 BHK Flat?," i said.

"Certainly, a few! But, a lot more than the flats all builders can construct near Hinjewadi! You know? Now, my boss is happy even if i book 5 - 6 flats in a month. Because, 5 - 6 flats at today's rate are - as good as - selling 10 - 12 flats at the launch rate. Point is - builder & buyer - all are happy! Only those who don't have "purchasing power" are complaining and blaming!!," my friend said.

My friend was trying to tell me that even the property prices are exorbitant & the sale is low, possibility of a "crash" or property prices coming down is zero!

3) A property buyer who complaints about a builder, mostly, has an "ego problem"!:

While we were talking, one of my old friends had joined us. Since, on my blog there were many comments on his project, i thought that it would be better to talk with him in private. So, i said, "Let us go & sit in your stall"

"instead of that, let us go and have a cup of coffee!," my friend said.

"Coffee? When did you start drinking coffee?," i asked.

"My boss has told me to 'keep Ravi Karandeekar away from my site'. So, my stall is not a good place for us to talk," my friend said.

"Why?," i asked.

"Ego problem!," my friend said.

"But, I haven't written about your project in so many months!," i said.

"You haven't but our buyers keep on writing comments on your blog," my friend said.

"Good! Solve the complaints. Your property buyers will start writing good about you!," i said.

"I would have done that but my boss sincerely believes that most customer complaints are 'ego problem' of the property buyers and the rest are misunderstanding and unrealistic expectations from the builder!," my friend said.

"So, what is the solution?," i asked.

"Ignore! Attending means pampering ego. Attending means wasting time to teach a person who is not ready to learn! Waste of time and energy!! My boss believes!!!," my friend said.

"Doesn't bad reputation affect your booking?," i asked.

"Double spread full page color ads in TOI are not that expensive - my boss says!," my friend said. I was about to say something but couldn't because Mr. Anil Pharande caught hold of me.

Related Stories:

1) FRIDAY, OCTOBER 14, 2011

PROFEST EAST & WEST 2011 - Pune Property Exhibitions

2) MONDAY, OCTOBER 3, 2011

Ravi Karandeekar's Most Popular Pune Real Estate Market News Blogs in September 2011

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  1. ha ha ha .
    This "appreciation" which lures ealier buyers is only the rates increased by builders for new bookings. The real test will be when the project is actually complete and actual secondary buyers who are actual users and not investors and speculators buy the property at the "appreciated" rate.
    Given interest loss on EMI and pre-EMI and inflation, is there actually any appreciation in ANY under construction project?
    think about it!!!

  2. Hello Ravi sir,
    The recent swelling in property prices of Pune are really not good. Currently, I am looking for a flat (first home) in Pune. I can afford to buy a flat of 50 lacs, but I don't find it logical to give away so much money for 1000sq.ft. Can you please suggest something for buyers like me?

  3. Times are close when renting will be preferred and modern options for accomidation

  4. thanks Ravi for this nice blog.
    Its really a eye opener for many buyers . Many a times I really feel pune real estate market is artificially inflated but strangely in reality facts are completely opposite. We always wonder for some new launches how can somebody ( read as working professionals) would survive in this area but over a time you can see that area gets projection as pune's next real hot destination. e.g. Kharadi ( few yrs back), Phursungi , wagholi etc etc … list is long.
    There are always buyers for any project people call these buyers "fresh blood". People who completes 2 to 3 yrs of his initial service in any IT company starts thinking of investing in property .Now new ventures like HBC or group buying are trying to cash this craze. But real drama starts when somebody want to rent his property or sell . There are hardly any buyers or renters to these inflated rates and remote locations. One of my friend want to cash these appreciated rates in " celestial city @ Ravet" but as expected he is still looking for buyers after tiring search of many months. Same case with my other friend who want to rent his property in Hinjewadi but he is finding its hard to get tenant for his flat with expected rent tag. So “invest in property ,see the appreciation but don't ever try to encash this appreciation otherwise frustration is guaranteed “... this is new mantra of pune real estate.
    Sp “Buyer’s” make your own “wise” decisions before investing . We or people like Ravi or salesman at builders office , are here to tell you their opinion but finally its “You” who is going to invest money … I will not say hard earned money . For many its really not the hard earned . its kind of easy money compared to their abilities (read average capabilities as said by famous Chetan bhagat) . I know many people who are just enjoying the surplus money with their spouses earning good salary by doing some low end jobs in IT companies. Also thanks to onsite earning in dollars adding to their financial statuses. IT companies are cashing on these average professionals by calling their services as “High end services “ , people are earning.. builders are earning by selling their damn properties to this new reach breed. So this average workforce is keeping happy their companies , pune builders and finally malls which are mushrooming all across.
    So take your own decision is the advice from common person like me.

  5. @sachcha : agree with you. But it is just not about EMI and interest rates. People aren't realizing that what happened in last 10 years is not going to happen in next 10 years. Last 10 years were good for every country and every economy.
    Now things have changed. People would realize it too late. The confidence indian people are showing is scary. I would be surprised if the property rates increase by more than 50% in next 10 years.

  6. Ravi, looking @ this it feels like you have became most hated entity amongst the builder's :-) because you shown the true face of them or their project on your blog, and you have lots of leader do you think that you criticize real estate market?? if yes then does it made any change on buying trends?? No I guess because main problem is whoever buys a property want rate should be double in 1 yr not thinking that if at all rates are double if you are staying in that property then it doesn't make any sense whether its double or half because it’s your home and you are not going to sell it and if you want to buy one you have to pay same rate or just move to manjari or Yavat, same as Girgaon came to Dombivali.
    But whoever just buy the property for investment they want it so the genius buyer stay aside and pay with same rate.. there should be some mechanism which will separate the buyers from investors don’t know how ?? but if that happened then real estate can see a sunrise. what you think?

  7. Buying at this price is stupidity.I know everyone claiming that property price never going to down again in future.But still as a buyer i never find a satisfying deal where i find reasonable price for a nice flat.Property prices may get down in 20 years.Government not controlling the NRI investors who are buying many flats on any price.And people who really need flats for residence not able to buy the flats.i have visited few sites where even builders asked me information like are you NRI.or have you been to abroad.Not everyone going to abroad in india.Affordable pricing only possible if these NRIs stop buying hundreds of flats in pune.

  8. Ravi,
    I agree that builders must have made huge profits from buyers(or so called "Fresh blood") but the same is NOT for individual buyers who are just sitting on PROFITS_ON_PAPER with realizing worthiness of their investment...
    Indian real estate market is trying to repent the formula's of appreciation(as in "buyers" mind) with false information...but universally accepted truth is truth and one day this truth(economics) will show its existence.

    where reading your conversation with these builders I really felt sorry for buyers who gets manipulated by greedy builders by selling a "shxt" at ridiculously high price...and buyers are equally responsible who are falling for it...

    thanks for your visit...buyers should take lesson from it..

  9. piyush said...
    Ravi is Negative Publicity making it more Positive
    (Maths: -ve multiply -ve equals +ve
    Or Irony I Suppose

  10. Great place and and it has a wonderful design also i liked it very much


  11. I am a software engineer, living in rented house since last 6 years. I have come from a lower middle class family, they don't have any land to sell and they don't own any business. I fulfilled all my commitments towards my parents. Now I am married and I am looking for a simple home to live and get settled, with a simple expectation of good locality. But, I can't afford 50 lacs wala 2BHK flat with 650 sq feet area. I can collect around 5 lacs max for downpayment and my salary allows me to have loan up to 25 lacs max (as my wife is a not in IT). 1BHKs are not avilable at all in the market. I can't afford a 2BHK for 50 lacs. What should I do Ravi Sir? Anybody listening to our class of Pune?

  12. I am from Mumbai. In the year 1999 i booked a 3 bhk flat in Lokhandwala complex @ Rs 4000 psf.
    Bandra west rates were about Rs 8000 then.
    I thought I have over paid. I also thought that Rs 8000 at Bandra was obscene, it will not last Real estate is a bubble etc. etc.
    Toady after 12 years Lakhandwala sell at RS. 17,000 psf and bandra at Rs 25,000 psf.
    I really dont know where will it stop.It seems that only the super rich people can now afford decent housing.

  13. I am new to this Link.

    I am thiking to book Prelaunch project for my own residence not for re sale,Because of 2 Major reasons

    1. It gives me initial low financial liabilities that is only interest and by that time I can shift my family to Pune because currently I am in Bangalore with Job

    2. With down time line of 2 years I would be in a position to draw more salary so I can afford Full EMI that time.

    But I have gone through the PLus and MInus of Pre EMI options, But what to do being from Middle Class family I dont have any other options.

    Reading above comments shows its not great to go for Prelaunch and Ready Possession I cant afford what to do?