Hi All ,

I hear that the Blue Ridge Phase II is not doing well. Anyone having any updates on this scheme? What is the possession date for phase II? Heard a lot of cancellations have been happening there any idea please update.

Thanks in advance.
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  • Originally Posted by arpit2k
    Builder community is closer to political class as they work like fund manager for them to handle their black money ... or it can be other way round i.e. builders are just the front face for politicians.

    True but then there are also builders who have projects in Dange Chowk, Ravet, Wakad, Balewadi, Mhalunge road etc. who want good connectivity to Hinjwadi. They on other hand will lobby hard for infra to be in place.

    Btw, what if IT cos decide to expand in some new place itself ?? The hinjewadi builder lobby idea will completely flop :D.
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  • Blue Ridge

    Any chances of Blue Ridge prices coming down to 4000 levels or only a recession can do it. I am looking for a 2BHK there?

    Salil
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  • Originally Posted by salildhawan
    Any chances of Blue Ridge prices coming down to 4000 levels or only a recession can do it.


    only if someone resells below 4k psf otherwise not seems closely impossible.
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  • Hi Salil,

    IMHO

    If one looks on a long-term basis ( 10-15 years at least ), chances of prices softening on either nominal or inflation-adjusted basis are very low.

    I was told that Hinjewadi IT offices employ about 100K people ( that's 100K families ) and half of them are IT "professionals" ( i.e. being able and willing to afford paying EMIs for their 1,2 or 3 BHK homes in various Hinjewadi townships).
    On the other hand I am also told that, total inventory already planned to hit the market in next 10 years is 15- to 18 K units combined between Blue Ridge, Megapolis, Life-R , Xrbia and other smaller developments.

    So if you match 50K families of current IT professionals with next 10 years of planned inventory of 15 - 18 K apt. you come severely short in favor of real estate.
    Other way to look at it is….that next 10 years of real estate inventory in the area will be more than scooped up by last 10 years of IT expansion and there will be plenty more demand that will remain unfulfilled.


    AND 3 more points…..
    ....IT companies are expanding to phase 3 and 4.
    ....There is reasonable "investor" demand for high-end inventory in the area.
    ....I was talking to one high level BR official...he told me that about 25 % of all of their inventory in BR was taken up by their past customers ( who may or may not have anything to do with Hinjewadi IT park ).

    Of course..a big assumption above is that
    if quality housing is available nearby, most people over time would want to live near their work ( especially if infrastructure poses daily challenge).
    Some folks on this forum may have a problem with that assumption.

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  • I agree that
    1. IT people working in Hinjewadi will prefer to live in Hinjewadi. Advantages are:
    1.1 Walk to work
    1.2 Clean air
    1.3 No traffic
    1.4 Integrated townships so no unplanned slums
    2. Projects like Blue Ridge have very nice flats with good layout and amenities. A school in the township is a huge bonus

    I dont agree that:
    End User who is an ITG will experience 5x increase in salary in the next 10 years. Salaries in IT have reached a plateau, and any increase will be small to keep pace with inflation.

    ITGs are buying flats with sponsorship from parents, coz parents lived a frugal lifestyle. How many ITGs have parents who bought a new vehicle every 5 years, dined out every week, had annual lavish vacations? So the savings of parents is powering the downpayments.

    My main argument is that these townships are targeted at average IT guy, and the price of a 2 BHK is already 60L. Will this price go to 3 crores by 2023? In that case, average salary has to go to 50L, no way that is going to happen!!!

    Also the true value of these flats cannot be determined looking at the price, since price is driven mainly by investors who are looking at profit from speculation, not at income from rental yield.

    How many investors are renting out their flats because that rental income makes a significant contribution to their income? This means that surplus funds which were anyways lying around are being pumped into real estate.

    Will a guy like me who looks are rental yield invest at these prices? No way. For me, rental yield has to be at least 6% for an investment to be attractive. So a flat in Blue Ridge at a price of 60L will make sense from a rental yield point of view, if the rent is 3.6L per annum, i.e. 30k per month.

    Now look at it in the reverse way, will an IT guy today be able to afford a rent of 30k, with a 10% annual increase??
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  • Abeer

    You are right, low rental yields should concern everyone.

    On the other hand if we look at urban real estate data in India, rental yields have ALWAYS been low. Look at Mumbai ( my God its true there ) or Bangalore....my amateur observation tells me that low rental yields are across the board in metros and goes back in history.

    One fellow I was talking to explained the conundrum as "psychology".
    We (Indians) have always put a far greater social value in owning the residence and also have looked down upon renting.
    No "respectable" family likes to live in a rental for a long time.

    If you ask me, its a stupid tendency, but never the less its a fact.

    Combine this strong tendency of valuing a purchase over a rental with ...ever increasing young population (i.e. demand),... lack of availability of quality housing,... increase in nuclear families, ...role of black money from politicians ( developers ) and ....so on...and you have the skewed prices of current and past RE market of Indian metros.

    Same can be said about demand for Gold in India.
    Only difference is, a house is something that's actually physically useful to a human being, gold is not.

    In all this, what amuses me the most is, the sources from where the funds are extracted by common people to come-up with the priced acquisition of a home.
    Just to name a few....first salary...then double salary...then inheritance...then selling other assets ( such as gold )...then borrowing from banks...then black money ( form "side-income")....then talking aging parents into entering this party and so on and so on....

    Believe me, I am ( and most of Indians who can count are ) also waiting for a collapse that's not in coming for last several decades !
    In the mean time prices have only gone from high to sky-high and to space-high.
    Growing up in 70s and 80s we have always heard elders in the home saying the same thing "this madness won't go on for long".
    Boy they were wrong !
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  • Rental yields have been quite high many times in the past. One period where I have myself experienced high rental yields was between 1998 to 2004, in Pune itself. At that time, rental yields were as high as 8%.

    Real Estate in Pune has also collapsed many times. One period which I remember was mid 1990s. At that time, builders were so desperate they used to send car and driver at home to pick up a prospective customer and give him a site visit.

    If you want an official confirmation of real estate crash, take a look at concrete data from Bangalore, the biggest IT driven city in India:
    NHB

    What can be more proof than that?
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  • Originally Posted by Superduper
    Abeer

    You are right, low rental yields should concern everyone.



    Rental Yield + Expected Real Estate appreciation > Inflation + 3-4%

    Today in Pune market;

    Rental Yield = ~2-3%
    Inflation is = ~8-9%

    And this means 'Exected Real Estate Appreciation' is 9-10%. Which means that property rates should double every 7-8 years; avoiding complicated calculation..

    Is it possible? someone who would look in to the past data, would immediately say 'why not, look at the data!'

    And this is the precise reason of global financial meltdown since 2007.

    Past is not a true picture of the future. We all know this but we all deny!

    Though, I advocate buying a primary property at any point, I do not see it as an investment alternative. Do not over-leverage and buy a property. If you have good savings and want to buy your first property, and you think that rental is not an option for you, only them buy a property.
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  • Originally Posted by toanuj

    Though, I advocate buying a primary property at any point, I do not see it as an investment alternative. Do not over-leverage and buy a property. If you have good savings and want to buy your first property, and you think that rental is not an option for you, only them buy a property.


    Words of wisdom.

    Vs.

    Endless, multi-generational, 10 yearly compounding rat-race.

    And
    Life goes on....!
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  • Originally Posted by Superduper

    Believe me, I am ( and most of Indians who can count are ) also waiting for a collapse that's not in coming for last several decades !
    In the mean time prices have only gone from high to sky-high and to space-high.
    Growing up in 70s and 80s we have always heard elders in the home saying the same thing "this madness won't go on for long".
    Boy they were wrong !


    :D Good one Super . Thanks for sharing evidence that in 70s and 80s things were no different.
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  • Originally Posted by compuwalah
    :D Good one Super . Thanks for sharing evidence that in 70s and 80s things were no different.


    Sir, You are quite welcome :D !
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  • Hi realacres,

    I don't think that any builder highlights GOOD CONNECTIVITY TO HINJEWADI in their projects, which are located in other areas. Instead they just highlight CLOSE TO HINJEWADI. They are not bothered if you are as close as 2-3 kms from Hinjewadi and it requires 2 hrs to travel due to jams.

    And regarding IT cos expanding in other area, they will not get tax sops if they move out of marked IT parks about which, policy is made and manupulated by Govt. (i.e. politicians). So again ... everything is directly controlled by them :bab (38): .

    Originally Posted by realacres
    True but then there are also builders who have projects in Dange Chowk, Ravet, Wakad, Balewadi, Mhalunge road etc. who want good connectivity to Hinjwadi. They on other hand will lobby hard for infra to be in place.

    Btw, what if IT cos decide to expand in some new place itself ?? The hinjewadi builder lobby idea will completely flop :D.
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  • booked 3bhk in blue ridge

    :bab (26):

    booked 3bhk in blue ridge!
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  • @marshaln: Congrats!
    Total package? Area details?
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