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Samrajya, Pethkar Builders, Kothrud, Pune

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Samrajya, Pethkar Builders, Kothrud, Pune

Last updated: May 1 2015
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  • Re : Samrajya, Pethkar Builders, Kothrud, Pune

    Originally posted by novice View Post
    But I do have a healthy respect for him and it sometimes seems that he is given a hard time since he is the face of the builder community in this forum.
    Dear novice,
    Thanks for your kind words, It encourages me to provide clarification on doubts raised by other members. Though sometimes its a hard time, it helps me to overcome my shortcomings and prepare myself for future challenges.
    Last edited by Pethkar Projects; March 24 2010, 01:11 AM.
    Jitendra Pethkar | Pethkar Projects

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    • Re : Samrajya, Pethkar Builders, Kothrud, Pune

      Originally posted by Jitu_Sir View Post
      I had clarified earlier that the rates were 5600-5200-4500-4800-5500. I had just taken one rate.
      you picked up 4800 at your convenience... if you had picked up the real launch price of 5600, then actually now you are selling the ready possessions at a cheaper rate...

      At every stage of this rate change, your position is that your project is VFM. So something was VFM at 5600 in early 2008 and now the same thing becomes VFM at 4500 in mid 2009 and now the same thing is VFM for 5500..

      there is no point in comparing airline business because they have more buyers than available seats. Because even they offer last minute cheap deals when they dont get buyers...

      As realacres pointed out, earlier it was the case because most of the projects were getting full at booking itself because of reasonable rates. Hence there used to be more buyers than availability when the project come near to completion. But i dont think thats the case here as some units of L6 are still available.

      What you are doing is, increasing the rates and still trying to woo buyers. sadly it is working for PBAP as common sense is becoming a rare commodity now a days...

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      • Re : Samrajya, Pethkar Builders, Kothrud, Pune

        5500 ....

        Builders have their choice to price the flat and buyer has his choice. Based on Market dynamics , values will change. Remember dotcom burst , same website companies went from million dollar to penny stocks. So we can only discuss about the price and decide whether it fits for us or not. Correct valuation will depend on many factors and hardly anybody has calculated it perfectly.
        Let me also understand first time buyer definition. I am assuming that this is the guy who works , saves his hard money and then wishes to buy home...all by himself and loan in 7-8 years of working span. If this is the definition , then 30-40L savings will be quite achievement. I have seen people staying in US for 5-6 years with decent salary and disciplined expenditure also find it hard to have this savings and above all will hardly have temerity to have another 40L of loan along with draining of 40L saving for 80L flat. So I find it very difficult to understand if somebody claims that first time buyers will have this savings. So from my analysis point of view -
        A. Prices from first time buyers point of view ( Unless you have financial support form parents etc) are wayyyyyyy toooooo highhhhhhh. Builders has already said about price curve from 5600... 4500 and again 5600. It will be taken to any amount and please do not bring quality , finishing , other amenities etc into calculation to justify price increase. So i think no point in wasting your time if you are in first time buyer slot.
        B. If you are second time ?? invenstment type , then see if this price makes sense. 5500 is already high price , so for longgggg horizon , it might work out. There are other threads indicating return of investments calc etc. For me , makes no sense of this price. But again if there are buyers , price will be justified without any rhyme or reason.

        C. Last time , when prices were 5600 , recession jumped in and all know what happened after it during last year and prices were brought back to "NORMAL" ( I guess) .Builder is slowly approaching to price tag of 5600 ( present price 5500) , so who knows what is in store?? maybe housing recession....

        D. I am still thinking what to write about loan rate increase , service tax etc. But anyway it is not helping us.

        So enjoy discussing and contributing your thoughts and decide wisely.

        V

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        • Re : Samrajya, Pethkar Builders, Kothrud, Pune

          I understand what Jitu says, it makes sense as a seller to sell at the highest price he can...
          He does not have a manufacturing unit with endless supply of flats. He has a plot of land inherited from family, which is only so much. Once this plot is filled up, he has NO OTHER land.
          Pethkar is not as big as other builders in Pune, so acquiring another plot is maha - difficult for him. Otherwise after so much goodwill in market, he would surely have launched other projects.

          Please understand, buying and protecting big plots in Pune has become HELL. Just like Mumbai, there are bureacrats, politicians, gundas, all wanting a piece of the action.

          This situation has been created by builders themselves (jointly, not blaming Jitu alone), because they are not willing to share profits with landowners. See Lavasa buying land at 32L per acre and then selling it for 10Crore per acre. So landowners do not trust builders, just like buyers do not trust them.

          So it makes sense for Jitu to make the max money he can from his existing plot.

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          • Re : Samrajya, Pethkar Builders, Kothrud, Pune

            Jitu,

            Can you give insight on the factors that led to price increase from 1600 in 2005 to 5000 in 2008?

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            • Re : Samrajya, Pethkar Builders, Kothrud, Pune

              Originally posted by novice View Post
              Value for money is a very subjective term, the people who are purchasing in his project see value in 5500 (ready construction property, transparent builder....so on and hence do so). You cannot standardize a formula of cost of land + construction + profit margin = price at which builder should sell, markets don't work that way
              There is an element of risk involved in property development too, in case prices had not recovered he would probably have had trouble finding buyers at 4500. Lets not forget he is not running a non-profit venture, he is a businessman. If you or I were in his position and find buyers at 5500, we would do the same. But spare the guy some flak, he is after all one of a kind among builders - transparent, honest and politely answers every question thrown at him.

              I personally cannot afford to raise 70 lakhs, so I have to keep my search on. But I do have a healthy respect for him and it sometimes seems that he is given a hard time since he is the face of the builder community in this forum.
              +1
              Very well said, and would like to echo these thoughts.

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              • Re : Samrajya, Pethkar Builders, Kothrud, Pune

                On the other hand, buyers are not very clear about real estate. Demand for real estate is made up of two parts:
                Consumption Demand (CD)
                Speculative Demand (SD)

                CD means demand from those people who want to stay in the flat. This demand is closely related to rent levels.
                SD means demand from investors who think they can sell the flat for a profit afterwards (in the next 3-5 years). This demand is related to how much money you can raise in the short term, irrespective of rent levels, and how much builders are increasing rates regularly.

                SD wallahs hope to sell off their flat later to CD wallahs. They cannot sell back to builder . Just as SD buyer wants to get profit, he will also experience losses from time to time.
                So just as prices have gone to 5500 from 4500, they can come down to 3500.

                A CD buyer has to play a waiting game, because SD buyers have limited time frames. They cannot lock money in vacant flats for 15 years.

                For a CD buyer, best thing is to keep money in liquid investments and wait for a crash to happen. Then pounce on the flat with 50 - 100% downpayment. Because at the time of a crash, cash rules.

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                • Re : Samrajya, Pethkar Builders, Kothrud, Pune

                  Originally posted by abeerbagul View Post
                  For a CD buyer, best thing is to keep money in liquid investments and wait for a crash to happen. Then pounce on the flat with 50 - 100% downpayment. Because at the time of a crash, cash rules.
                  Great point. And therein lies the issue.

                  CD demand>SD demand. But SD has appetite for risk, CD generally risk averse.

                  SD knows even if crash happens, CD generally has weak knees, and never acts on time. CD rarely pounces on the flat with 50%-100% () down payment.

                  In a crash, banks stop lending, so even 50% is tough to raise. CD only watches from sidelines during the crash. The odd shrewd CDs with 100% cash during a crash who actually buy and take decisions are aberrations. Because most CDs believe that in a crash, cash is king.

                  If all the CDs pounced together during a crash, there would be no crash. Because the SDs will escalate prices faster than CDs can line up to buy.

                  With leverage a SD makes hay while CD is baking and sweating in bright sunshine. Of course the SD gets caught out every now and then at his game. But because SDs are generally fewer than CDs, they are able to liquidate and get out when market improves slightly, that's if he got his maths right and didn't get too greedy.

                  Unfortunately, a shrewd and shady minority SD always rules the CD cattle majority.

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                  • Re : Samrajya, Pethkar Builders, Kothrud, Pune

                    Already Rane builders is doing it for most of it's completed projects.
                    I don't know how it makes any business sense to them.

                    Jitu,

                    How about renting ready possession flats which are not getting sold?
                    I would like to opt, if you start renting flats in Samrajya

                    Originally posted by mymarji View Post
                    Now I think very soon most of the builders will start renting the unsold apartments as they will not find any buyer for them. I am waiting for that day very eagerly.

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                    • Re : Samrajya, Pethkar Builders, Kothrud, Pune

                      Originally posted by ttt43 View Post
                      Jitu,

                      Can you give insight on the factors that led to price increase from 1600 in 2005 to 5000 in 2008?
                      Dear ttt43,
                      Increase in prices are primarily for the following reasons:
                      1. lesser number of projects in and around kothrud.
                      2. more demand and lesser supply.
                      3. increase in land prices due to shortage of land banks in kothrud.
                      4. substancial improvement in quality for associating with better brands.
                      5. Lending rates of home loans.

                      These are some of the promnient reasons for increase in rates from 2005 till date.
                      Jitendra Pethkar | Pethkar Projects

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