Pune builders & Pune property buyers are in deep trouble:
Recently I had a cataract operation. For some time, I was totally cutoff from Pune real estate market. Now, doctor has permitted to work for some time. On 919860044110 I have started offering advice about buying a home in Pune. I have started reading conversations of property buyers' groups on WhatsApp. I am back in the land of fear. I am back in Pune real estate market.
In this land of fear, every Pune property buyer is under never ending fear. Starting with fear of rising property prices. Fear of may not be able to own a home. Fear of delayed possession. Fear of poor construction quality. Fear of occupying a flat which has not received completion & occupancy certificate. Fear of no water supply. Fear about builder not forming society. Fear about builder not complying with the conveyance deed. Fear about not becoming a true owner of the property.
But you know what? When i visited Facebook, ePaperBeta.TimesOfIndia.com & Online3.eSakal.com I realized that the builders in Pune are also under never ending fear. Fear of inventory of unsold flats. 67,557 Unsold flats - 70.64 msf in Pune. Fear of getting wiped out of business. The builders in Pune are in fact more frightened than Pune property buyers. Particularly, the 'so called' big builders.
Unable to find a solution for getting out of the deep trouble, these builders have gathered together under the leadership of Mr. Sujay Kalele, CEO of Kolte Patil Developers Ltd. (Yes, both still exist!)
Our "channel partners" - means the estate agents - the brokers - are the main culprits. These channel partners on whom we were depending for so long have let us down. Because of these lazy channel partners we are not getting bookings. We have to get rid of these buggers. All big builders agreed.
We have to eliminate the human element from our business. Like all humans these channel partners are also filthy animals.
We are here to exploit all filthy animals on this earth.
To exploit these filthy animals we have to use technology. Digital marketing technology. Amuratech.
All agreed. No one objected.
Because everyone is in this business to exploit human beings. Not to join hands with them or to serve them.
But, there was one problem. The print media houses.
If we go digital the traditional print media houses will get angry with us. A few builders feared. After all these media houses have invested in these builders' companies.
Don't worry. We will give them their cut. Ads and paid news. It's a matter of our survival. Some builders assured.
But wouldn't it create an impression that all of us are in deep trouble? One builder objected.
Aren't we all in deep trouble? Someone said.
Launching big digital marketing campaign means accepting that all real world efforts failed miserably. One builder objected.
Don't be too realistic. Be digital. Go national. Go global. Go world wide web or go down the drain. Someone said.
All agreed. Indian Realty Flash Sale was announced. And the farce began.
Indian Realty Flash Sale created digital terror. Visit www.IRFS.in & short list the projects. Only a few units are available at discount. Digital discount coupons available from 25th. Download coupons. Rush to the sites in the next few days. If you are late you will miss the discount offer.
Digital terror creates digital anxiety. May make some anxious in real life too.
And those who are anxiety prone may visit the sites.
Will these anxiety prone guys book a flat?
No.
Why?
Because these guys will anxiously wait for more discount. More drop in property prices.
Now, these price conscious anxiety prone property buyers have the digital proof that Pune builders are in big trouble and they are ready to reduce the property prices.
If we don't book for a few more months - just 6 - 7 months - we can break the builders. We can force these builders to reduce the prices.
The price conscious property buyers will overcome their anxiety and will become brave. Thanks to that discouraging & disappointing experience of site visit.
Now, the long expected price correction looks possible - in very near future. These Pune property buyers will tell themselves.
And they will come to conclusion that - this is not the right time to book a flat in Pune real estate market!
Of course, all mainline news medias will publish the news stories about the huge response to Indian Real Estate Flash Sale. The so called news stories will talk about the number of digital discount coupons downloaded.
Because one can download as many discount coupons as one wants - for free - I have downloaded all Pune property coupons. The overall worth of my downloaded coupons's properties is a few crores. Means, a few thousand people are enough to claim a sale of a few crores. What a farce!
Some are not going to enjoy this farce. Particularly the investors and those who have already booked in these projects.
If a Pune builder can't sell under construction property at the current rate for payment in installments - who will buy from me - ready possession property - at the higher appreciated price - by one stroke - lump-sum - payment? Investors are worried. But this is not all.
These investors are always prepared for less appreciation. But not for loss. Though they know that loss & profit are two sides of the same coin.
However, no investor can think of losing his capital.
Because of the IRFS farce these investors will withdraw their investments as fast as they can.
But how many builders are in a position to repay the principal amount?
For the investors it's only about money. But for the actual home buyers, this farce is the confirmation of impending tragedy.
The good names will frighten him. Now, it's not only about big builders. Not only limited to Kolte-Patil, Amanora, Pride Purple, Tata Housing & Panchshil. Now, even Godrej, Nyati, Saarrthi, Kasturi & Nandan are also in the line. Sad. Very sad. He will say.
Will my builder be able to complete the project in which I have already booked a flat?
How can I keep on paying pre-emi & rent if my builder delays possession indefinitely?
Did I make a mistake of booking a flat at the launch of project?
Was it stupidity to go for a big brand in Pune real estate market?
If my builder reduces the property prices for new bookings - will I get that reduced rate - even if my flat agreement is registered?
What if my builder becomes bankrupt?
The actual home buyers who have booked the flats in Pune real estate market are worried.
But no sales executive or builder is available to answer his questions.
Or there is no digital answering system for these filthy animals on earth.
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I feel very sorry for you mate!
ReplyDeleteI was alone in a few blogs that include posts on Capital Mind, A's blog,,B's Blog,,Economic Times, Hindu Articles, .....numerous others.... On the issue above...
First thing that comes to my mind is Financial Illiteracy among the Educated Inteligentia.
Then there is the line in between Greed and Fear, like in Stock Markets.
Then the hand of gullible builders , coming kid in glove with bankers....
I still remember one thing! Small is always beautiful ...
People never bothered about how much they can afford.
People never bothered about the difference between Cost and Price....
10-15 years back, they were contemplating whether it is a Floating or Fixed rate of interest...only to realise that a FIXED is NEVER fixed and a FLOATING never floating....
Big builders can make huge promises,but there is no one to check....if Mantri Promised a Money Back Guarantee policy on a purchase, people were greedy enough....if a dead line is not met by KPD, it is left to the hands of the individual, and no law come in between, and even if it comes, it will take years to lose the battle, both financially as well as morally ....
I Believe, the control is in our hands....never go near these look-a-like opportunities , which will not create assets, but liabilities.....
Simple math says your EMI Payout in twenty year loan is more than the original PRICE....
Simple logic says you never own such a home, the bank will possess it as soon as your payment is not viable....even if you are able yo pay, you won't come out of the Mathis, regretting your decision.....because you feel shy in society to admit that you were fooled......whadyasay?????
The builders, investors are facing the fruits of their own deeds - greed and more greed, while the banks see big jump in NPAs due to large scale defaults. Even for this, banks are to be blamed as they lent more based on speculation without bothering about repayment capability.
DeleteRising NPAs put banks in a tight spot -
http://www.thehindu.com/business/Industry/rising-nonperforming-assets-put-banks-in-a-tight-spot/article7318742.ece
Pune realty has even bigger problem now : No buyers from FRESHER category. No big paying jobs, neither are hikes in double digits to most, especially IT - the sole sector which fuelled real estate boom in Pune.
Check today's news :
IT placements slow down as companies talk of unemployability -
http://indianexpress.com/article/cities/pune/it-placements-slow-down-as-companies-talk-of-unemployability/
No matter how many realty expos these builder conduct in various hotels, grounds, farms in the city. Without affordability, how can sales take place ? There won't be sales unless prices crash further.
This IRFS is just a start, more to follow.
Ravi,
ReplyDeleteExcellent article. You spoke my mind. IRFS was nothing short of yet another gimmick from builder lobby, this time direct in the face though. Maybe they don't even have money to pay commissions to (useless) brokers !
It is indeed good to see that real estate is in mess, the greedy & cunning builders alongwith investors are getting a dose of their own medicine. Let them also feel the pain of home buyers who have been tricked by this builder-investor combine for years together.
Once investors loose money and builders understand that they have to deliver & on-time, speculation will fall and end users will be the king customer, as the case should ideally be in any business.
All this online stuff made one good thing : It gave big proof to all, that Pune real estate crash has officially started and it has left no builder untouched, big or small. Investors too should learn to take hit now & understand that every day can't be Sunday.
As far as I am concerned, it's happy renting for me at fractional cost of ownership. Will think about buying ready for possession flats once prices fall by atleast 50%.
Thank you once again for great article and exposing such gimmicks Ravi. Keep up the good work.
ravida, its an eye opener for ur readers who want to buy their home, as who make the builders which what they are today? Answer is the buyers, who made their emotions available to the builders! A bit matured & sensible approach by the buyer is what missing in real estate all along! BTW met Kedar Koppikar at one of our plantation drive, ur blog reader who booked flat at sanjeevani from reference through ur blog & i feel i did stood to what u write about sanjeevani :)
ReplyDeleteAs its a responsibility when someone speaks good about you to live up to those good words or else the goodness will vanish from this world !
sanjay deshpande
That's what I like about you, Sanjay! You are a responsible builder.
ReplyDelete