I have got confirmed news from one of family friend who works with one of the reputed builders (from Pune), that property market in Pune is getting worse day by day. Many people who has signed but not made agreements are cancelling the deals (due to job conditions). Plenty of new projects are at High Risk. Many wise builders stopped the launch of new projects (including Paranjpe, DSK, Kumar).
People don't have money to pay EMI. Investors are not getting good rents. They want to sell off.
All in all, by Diwali rates will be down, if not the same.

You still can buy a flat if you have secured job and enough of money in hand. Those who want to take loan (more than 10L), please don't take risk.

Sansona
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  • Originally Posted by PointOfView
    @compu: very good analysis.. you really dig deep in the threads.. :Applause:

    I was going through some initial pages of Hubtown Countrywoods thread.. man o man.. prices were 2700 in 2010 and bears on this forum were saying not to buy. see now, project is near possession as some buyers have received pre-inspection letters. rates are 4k psf now.



    Thanks POV. nice to know someone is reading thru the analysis and hope will be useful for future visitors. Not advising to blindly buy but keep in mind that the falls theory and rise theory are all speculations. Do not base your buy on any of such events. For end users if its in the means then do not prolong your search window over 6 months before finalising the deal if its for self use.

    For investors advise is different. You are doing this for money so you have to take judgement but based on these extracts you should decide for yourself as how much weightage to give to the posts. Also you have alternate avenues to park money (though returns may not be that spectacular) till you think right buy price/right location combo has arrived.
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  • @Compuwalah & @tarcap: Excellent analysis guys!
    One thing i understood from past 2-3 years on this forum is this, this forum underestimated the builders a lot and it tried to link global economy and IT with Pune real estate. In reality, builders turned out to have really deep pockets and were able to hold out a lot longer (yes there are ofcourse some exceptions where rates got reduced but over a time it again went up) and were not just dependent upon IT for their sales. Inflation too added a lot to these costs, but builders never trimmed their margin and ultimately buyers had to pay.
    I am not saying global economy doesn't affect us, but in my experience i have seen the local economy (read shopkeepers, traders etc.) easily beating global economy (IT, manufacturing etc.). So as someone rightly said, if you can afford it, buy it.
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  • Originally Posted by ati11a
    @Compuwalah & @tarcap: Excellent analysis guys!
    One thing i understood from past 2-3 years on this forum is this, this forum underestimated the builders a lot and it tried to link global economy and IT with Pune real estate. In reality, builders turned out to have really deep pockets and were able to hold out a lot longer (yes there are ofcourse some exceptions where rates got reduced but over a time it again went up) and were not just dependent upon IT for their sales. Inflation too added a lot to these costs, but builders never trimmed their margin and ultimately buyers had to pay.
    I am not saying global economy doesn't affect us, but in my experience i have seen the local economy (read shopkeepers, traders etc.) easily beating global economy (IT, manufacturing etc.). So as someone rightly said, if you can afford it, buy it.


    perfectly said..in fact IT engineers can not afford to buy such expensive homes..the demand is clearly driven by many sectors..IT is just a fraction of total population who purchases RE..

    for example..one of our relatives..a rich farmer has 3 flats in amanora township..clearly there is lot of demand of RE amonst all sectors..whether or not IT guys buys or not does not make any impact on pune RE..thats why pune RE prices are still increasing and most probably increase or in worst scenario would become stable but will not drop..

    thats the fact..the earlier we understand this..the better it is for all of us..
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  • In todays Sakal (Marathi newspaper), i saw the following news: http://epaper.esakal.com/Sakal/30Aug2012/Enlarge/PuneCity/page3.htm

    It mentions a businessman was duped by a builder for 72L, which he had paid as booking amount for 10 (TEN!!) flats! Even if we ignore the duping story, it points to people who buy flats in bulk which noone in IT or any wage worker can afford.
    Even in my building, out of 40 flats (all sold out and people living there), just 3 are IT (including me). Rest are all from various profession: businessman, professor, CA, lawyer etc. And i can easily see that those nonIT people drive fancy cars (multiple sedans, SUV) vs hatchbacks (in my case not even that :( ) driven by IT.
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  • Originally Posted by ati11a
    Even in my building, out of 40 flats (all sold out and people living there), just 3 are IT (including me). Rest are all from various profession: businessman, professor, CA, lawyer etc.

    A businessman, CA will never over-leverage. They think about money 24x7 ;).
    And check professor & lawyer age. I am sure, they must be elder than you.
    And they driving fancy cars itself shows they are not over-leveraged. :)

    And i can easily see that those nonIT people drive fancy cars (multiple sedans, SUV) vs hatchbacks (in my case not even that ) driven by IT.

    Sorry, but I think you have over-leveraged for sure.
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  • Mods can we please update the thread title to
    "Pune property rates will be down by Diwali 2009"

    This will avoid any confusion and give a more clear picture as to which Diwali we are talking about..
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  • Originally Posted by realacres
    A businessman, CA will never over-leverage. They think about money 24x7 ;).
    And check professor & lawyer age. I am sure, they must be elder than you.
    And they driving fancy cars itself shows they are not over-leveraged. :)


    Sorry, but I think you have over-leveraged for sure.

    I dont think so. Atleast i still maintain a healthy bank balancr today and in last 2 yrs have got my loan tenure to <10yrs from 20 yrs.
    Agreed that the lawyers etc. are 10+yrs older then i am. But still the point remains,for such people, 50+ or even 70+ lakhs houses are easily affordable. And pune has a huge number of such people.
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  • Originally Posted by realacres
    A businessman, CA will never over-leverage. They think about money 24x7 ;).
    And check professor & lawyer age. I am sure, they must be elder than you.
    And they driving fancy cars itself shows they are not over-leveraged. :)


    VERY TRUE.
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  • Originally Posted by PointOfView
    @compu: very good analysis.. you really dig deep in the threads.. :Applause:

    I was going through some initial pages of Hubtown Countrywoods thread.. man o man.. prices were 2700 in 2010 and bears on this forum were saying not to buy. see now, project is near possession as some buyers have received pre-inspection letters. rates are 4k psf now.


    @realacres

    Can you please comment on the increase of price for above project from 2700 to 4000? You may be aware that you are predicting bubble burst theories since 2010. But to the contrary the prices have increased.
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  • Originally Posted by kingsmead

    for example..one of our relatives..a rich farmer has 3 flats in amanora township..clearly there is lot of demand of RE amonst all sectors..


    Does this Mr Farmer intend to live in all three flats? Probably not. These are pure investments. Just like NCDs.

    When a 60 year old grandfather buys toys for 5000 rupees, does it mean that there is a demand for toys among 60 year olds???

    WHen defining demand, you cannot just focus on who is buying it, you also have to think about who is going to use it.

    Mr Farmer is just a stockist who will sell it to customers sooner or later.
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  • Originally Posted by NG2012

    Mr Farmer is just a stockist who will sell it to customers sooner or later.


    Why would he sell sooner or later? Could it not be possible that he has 3 children (sons and daughters) for whom he has purchased those flats? Or maybe he is looking for rents only for living happily without work? Or maybe he just likes Amanora views so much that he purchased flats on 3 sides!

    It's a classic mistake that economists make, that everything is for sale, because consumption itself is limited. However, as population is ever growing, consumption is not going to be limited/converging to single number, but would be increasing at least by the rate of growth of population, if not more as the rate of increase in upper class families is more.
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  • Originally Posted by NG2012
    Does this Mr Farmer intend to live in all three flats? Probably not. These are pure investments. Just like NCDs.

    When a 60 year old grandfather buys toys for 5000 rupees, does it mean that there is a demand for toys among 60 year olds???

    WHen defining demand, you cannot just focus on who is buying it, you also have to think about who is going to use it.

    Mr Farmer is just a stockist who will sell it to customers sooner or later.


    who the hell cares from whre the demand is..the general rule in any business is demand and supply..when there is more demand than supply..prices will tend to increase and vice versa and in fact as you might be noticing are increasing consistently in pune..the point which i was making is there is more than enough demand for RE from all sectors and not just by IT..

    my friend if there is not enough demand for RE..do you think the prices would have increased at this level..they have increased at this because of what??? can you answer this 1..
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  • Originally Posted by kingsmead
    who the hell cares from whre the demand is..the general rule in any business is demand and supply..when there is more demand than supply..prices will tend to increase and vice versa and in fact as you might be noticing are increasing consistently in pune..the point which i was making is there is more than enough demand for RE from all sectors and not just by IT..

    my friend if there is not enough demand for RE..do you think the prices would have increased at this level..they have increased at this because of what??? can you answer this 1..


    One of the answer is - "Fear". Thoughts like "If I don't buy now, I will not be able to buy later". "Prices are skyrocketing, I should decide immediately and book anywhere/anything that fits in my budget/or stretch budget and buy".

    Builders know this well, they are doing nothing but tightening the market. The more they tighten, the more fear is generated amongst buyers.
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  • Had a chat with a builder who belongs to my hometown, over the weekend. His project is in Balewadi. Per him, the cash flow is very low now, and infact of few other builders in the same vicinity. Why don't you lower the price a bit?..was my obvious Q to him. Guess his answer - "If I reduce, customer will think something is wrong with the project or it is not worth to buy here. I will rather wait than reduce the price, till others also reduce in this area". :o
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  • Originally Posted by NG2012
    Does this Mr Farmer intend to live in all three flats? Probably not. These are pure investments. Just like NCDs.

    When a 60 year old grandfather buys toys for 5000 rupees, does it mean that there is a demand for toys among 60 year olds???

    WHen defining demand, you cannot just focus on who is buying it, you also have to think about who is going to use it.

    Mr Farmer is just a stockist who will sell it to customers sooner or later.

    You have raised an important point. The truth, as I see is that the demand is UNREAL whereas the supply is REAL. Wherever you see, construction is going on. It is just a matter of time for truth to unfold.
    In fact, I personally met a person who holds 16 flats in Kondali (Sonipat). Many admire his bravery, but I pity his foolishness.
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