Dear Forum Members, following post is only my opinion!! Feel free to comment.

Well, every knowledgeable person in this forum is trying his / her best to explain the current situation in Pune real estate market. They are trying to explain the past and predict the future. Few of them have their thought based on immense knowledge due to the experience in real estate market, whereas others who has expertise in finance and market conditions of India. Few are victims of the boom, whereas few are just shrewd guys explaining and predicting things based on analytical skills they have ……

Don’t forget there are some marketing guys among us too.

But there are large numbers of people who are planning to buy their first home soon…. May be This Diwali… This post is for these people. Please read through this and if you feel that it makes sense then WAIT till next year. Here is what I have learned in last few years -


    In last two year infrastructure is not significantly improved around suburbs of Pune, but the rates have. Water problem, Transportation, DP roads, MSEB Meters issues everything has remained as it is since last two years. The only thing improved in Existing Main Roads and May be at some locations - BRT. Both have their own reasons why they are being implemented so rapidly.
    In last 1 year (after the slowdown hit), the whole focus of the builder community was to sell what is available in their inventory. The 50% builders were able to sell their 75-80% inventory (Good Projects Only) (Don’t get surprised - there was large number of people who do not read this forum or don’t know it exists, but who needed homes urgently and took advantages of stable or reduced prices). These builders have at least recovered their cost if not found profits.
    Bigger projects, such as townships and high end projects were flops. It seems that exception is Nanded City. But not sure about it. Whatever they had launched, most of it, they were able to sell with 2500 rate. But there are buildings they have not yet launched in Phase 1 (I think 2BHK ones) and then Phase 2 is still there. Secondly, most of these projects haven’t even taken off which means minimum loss to builders (may be only cost of land if purchased, cost of plan sanctioning, foundation if planted and Marketing).
    Various surveys have been made prior to slowdown (and after the slowdown and in recent months) regarding requirement of homes in Pune or all over India. These surveys are showing the numbers that have made builders more excited during the boom time and now more hopeful in not so recent slowdown. Most of us don’t know these surveys and its data. But what I can tell you that, builders know more than most of us in this forum about it and future prospects of real estate. If Indian Market is going to improve in future they would be the first to know it. One of the surveys made public recently was the need to “Budget housing Projects”.
    Elections are going to add another dimension to Maharashtra real estate market. Change or not change in “Sarkar” will change the RE market drastically.
    IT industry which was the root cause of the real estate boom has itself suffered enormously due to American market turmoil. But real estate market of Pune had already moved away from IT. Indian businesses, industries and services improved in last couple of years in Retail, Auto, Oil, Steel, Pharma, Exports, Food, Medical etc. including government income improved which made real estate market to flourish without IT. Real estate has moved on. One example is where Ford, Toyota and GM suffered due to American slowdown; domestic auto market was relatively unharmed. Who is buying all these cars? People who can afford to buy cars can certainly afford to buy a home right?
    Basically Income has improved in Cities. not same thing for Rural. There are a large number of people traveling towards cities now. Ask, your daily Cab driver, where is he from and if he has a home yet in Pune or not…
    And finally, global market is in recovery mode.
    Unfortunately, most of the members in this forum are IT people or related. If you don’t believe me, let’s take a poll!!

    Let’s come back to Real Estate. Here are some categories of the Projects that I would like to make based on current situation of real estate market.





        Builders with good Projects – While we are talking about these projects in length in this forum for last one year, builders were able to sell around 80% of the inventory they had. Naturally, they have increased the rates as they now know that these projects are popular ones or they don’t have major inventory left.
        Builders with flop Projects – Well, they have not increased the rates of their project. Mithila, Bloomfield, Amonara, Swiss County to name a few. Most of them would be available for negotiations too. But as I said earlier, most of these projects haven’t even taken off which means minimum loss to builders.
        Builders who are yet to launch new projects – Type 1. There are few builders who do not have existing inventory or is already recovered cost and but have some new projects they want to launch.
        Builders who are yet to launch new projects – Type 2. There are few builders who are stills struggling with their existing inventory and but to add to their misery they still have some new projects they want to launch. They are in immense pressure to sell their existing inventory. You will start seeing ads in paper from these builders. Mostly these ads will be for the projects which are know since last one or two years.
        Builders who are in loss - Well, I don’t know yet how to identify these builders but as far as I can tell, only small scale builders would be in this category for now. They will have less than 3 projects at their hand at this time.

        Now, let’s talk about price hike – I think its driven by an organization or an association

        a. Builders with good Projects – Of course they have done it. They were successful to sell most of their flats. Now they can increase their prices the way they want.
        b. Builders with flop Projects – No increase in price seen here.Most of them would be available for negotiations too.
        c. Builders who are yet to launch new projects – Type 1 – Of course, they are waiting for Diwali or even New Years Eve. They don’t really bother about current price hike and discounts. But, if price increases for existing projects, launching rate of new projects will go up too.
        d. Builders who are yet to launch new projects – Type 2 – They will be OK to increase the price now, and will provide huge discount in Diwali. People who don’t closely follow this will fall for it. And flats would be sold at the same rate that of 6 months back. Builders will come close to closing their inventory. Secondly, they would be launching new projects with attractive rates in Diwali, hoping that people will rush to buy. Increasing cash at their hand.
        e. Builders who are in loss – These guys are screwed anyways. Whether to increase the price or decrease it a lot. Builders association would be forcing these builders to keep quite too.

        Now, why not to buy a House in this Diwali?

        You will be buying a house from one of these explained categories. I can not predict that your decision will be right or wrong, but I can certainly say that you would end up paying the amount that you could have paid in last one year or in worst case you would end up paying much more.

        But if you wait till next year, you could end up making a resale purchase or a making better decision just by analyzing market situation at that time. If real estate is still booming, your jobs conditions might have already improved too (salaries, promotions etc.) and you would be able to afford the flats anyways.

        For Projects that will be launched between 2009 OCT to 2010 April, the launching rate will be around 2100 to 2550. This will look attractive to most of us, because of the recent hike in prices of existing projects. And we will end up paying hell lot more than these projects and their locations deserves. But again, you can buy flats in these new projects in 2010 as well. So why hurry in this Diwali?
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  • Originally Posted by sam2008
    hi gofstrara,
    from which planet r u. r u looking for a home in pune ? if so then u r at wrong place...now rates r starting to increase so better keep urself away from Pune RE.
    sam...


    I am sure "gofstrara" is from planet Earth and is frustrated Builder/Agent in Pune.
    Well "gofstrara" if you feel such post will stop RE from falling, all the best to you. soon
    you will realise you are no one to decide the price of RE, its pure supply demand.
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  • Originally Posted by gofstrara
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    This is a spam.

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  • Basically it a trick that the RE agents are doing taking the advantage of our own foolishness. When some body asked us how big is your house we simply tell that 1/2/3/4 BHK which is not the exact way to say. A person can build just a Bedroom with 1500sqft or 3 Bedroom. It is his/her choice.
    The same advantage is builders are taking now. They are not talking on the size, they are talking on no of Bedroom.

    Now Builders are also sending Diwali/Festive msg. Dont know what happened to them. I think their FAT tell Got Shrink.:D
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  • I am not from Pune. Can somebody inform on whether the property prices went up or down or remained same in this Diwali season. How much was the approxmate difference if there was any in general. Interested to know especially pimpale saudagar area.
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  • Originally Posted by Narasinha008
    I am not from Pune. Can somebody inform on whether the property prices went up or down or remained same in this Diwali season. How much was the approxmate difference if there was any in general. Interested to know especially pimpale saudagar area.


    For some projects is went up and for remaining it stayed the same.
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  • open your eyes and read :)
    ]http://www.dnaindia.com/money/comment_are-the-banks-keeping-property-prices-up_1298718
    is this a truth ?

    Especially the last section
    is this a truth ?

    Especially the last section
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  • Originally Posted by s_rathore
    open your eyes and read
    ]http://www.dnaindia.com/money/comment_are-the-banks-keeping-property-prices-up_1298718
    is this a truth ?
    Especially the last section
    Very true, the builders are largely bailed out by Banks. I dont blame Bank for this, they are doing what is in their interest, I am mean they are doing business.

    Interesting thing to note here is that this gives the builders some breathing time, which is temporary, not permanent.

    Tomorrow the same bank will knock the doors of same builders for recovering the loan given. Builder then will have no option to clear out their inventory quickly, selling cheap or even at loss.

    So keep patience and watch the drama.
    Very true, the builders are largely bailed out by Banks. I dont blame Bank for this, they are doing what is in their interest, I am mean they are doing business.

    Interesting thing to note here is that this gives the builders some breathing time, which is temporary, not permanent.

    Tomorrow the same bank will knock the doors of same builders for recovering the loan given. Builder then will have no option to clear out their inventory quickly, selling cheap or even at loss.

    So keep patience and watch the drama.
    Very true, the builders are largely bailed out by Banks. I dont blame Bank for this, they are doing what is in their interest, I am mean they are doing business.

    Interesting thing to note here is that this gives the builders some breathing time, which is temporary, not permanent.

    Tomorrow the same bank will knock the doors of same builders for recovering the loan given. Builder then will have no option to clear out their inventory quickly, selling cheap or even at loss.

    So keep patience and watch the drama.
    Very true, the builders are largely bailed out by Banks. I dont blame Bank for this, they are doing what is in their interest, I am mean they are doing business.

    Interesting thing to note here is that this gives the builders some breathing time, which is temporary, not permanent.

    Tomorrow the same bank will knock the doors of same builders for recovering the loan given. Builder then will have no option to clear out their inventory quickly, selling cheap or even at loss.

    So keep patience and watch the drama.
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  • Get rid of balconies and terraces...

    One feature of Pune flats is their terraces. We in Thane and Mumbai are not really used to this particular feature. Our balconies and living rooms are combined into one single unit, with a very small balcony attached to a bedroom, as in our case. Terrace flats are seen only on the first and top floors, not on all floors as in Pune. So even if the builders charge 50% - 60% for the terraces, removing them from the overall plan reduces at least 300 - 400 sqft of salable area. This would reduce flat cost by at least 9 - 12 lakhs considering a rate of 3000 psqft! So a smaller flat with less gallery space would definitely attract more buyers.
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  • But seriously, Is it really a good time to Buy a Home?

    Every passing day Its getting very difficult to take the decision because if not now then when? We read all the stories on web but how would one know what would be the state of things in coming years?
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  • 2010 April

    May be 2010 April is when People should try to search for new homes. After getting salary hikes.
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  • 10 % hike is ok. Not more than that.
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  • The best time to buy a home ...

    Originally Posted by Technocrat
    But seriously, Is it really a good time to Buy a Home?

    Every passing day Its getting very difficult to take the decision because if not now then when? We read all the stories on web but how would one know what would be the state of things in coming years?



    Techocrat and Space,

    Imagine you have 10 years work experience. Imagine that the fair market salary for you, even in bad times, is Rs.50k pm (say 40k net of taxes) and a monthly spend of 20k. Imagine you have a saving of 25L (how? a rich uncle?:D). Then, if you can put down 20L for a home and have an EMI of around 15k (and also that home prices are at a real bargain at that time so that, going forward into the future you will only see a higher value for your home), then you are in a good position to buy the house!!!

    This gives you a 5L cash cushion for any eventualities. It keeps your EMI at 37.5% of normal take home salary and 30% of gross! When you spend 15k+20k, you still have 5k extra cash for small onetime expenses or emergencies. When you have a little extra cash, you can always pre-pay and reduce your burden as you go along!

    Also, with around 10 years experience, you are probably in the 30-35 age bracket and can easily get that 20 year loan as you have good earning potential till 55. And with gradually increasing salaries, your EMI burden will soon cease to be a burden (probably your fuel bill will become bigger than that, with the coming oil crisis!:D)

    Most importantly, you have the peace-of-mind that you get when you can count the cash in the bank after all monthly expenses!!!

    Space - What makes you so sure that salary hikes are coming in April 2010?!

    cheers
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  • Originally Posted by wiseman
    Techocrat and Space,


    Space - What makes you so sure that salary hikes are coming in April 2010?!

    cheers


    I think they will go up. I am in IT and think outsourcing is here to stay and grow. fueling rest of the economy/industries. I am expecting sal hike before 2010, thats because I am in such company. Rest can expect it in April.
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  • I too am in IT!

    Originally Posted by Space
    I think they will go up. I am in IT and think outsourcing is here to stay and grow. fueling rest of the economy/industries. I am expecting sal hike before 2010, thats because I am in such company. Rest can expect it in April.



    Space,

    I too am in IT for the last nearly 25 years! :D No kidding!!!

    As you might have guessed, I am what one calls a "senior" IT guy (whatever that means).

    And you are right. Outsourcing is here to stay. But there are a couple of small problems ... especially with salaries being hiked as though its an God-given entitlement every year irrespective of circumstances ...

    1. Soon the cheap destination becomes costly without an equivalent improvement in efficiency, thereby making the overall cost increase in real terms, and

    2. The kind of deflation and work disappearing in the US (and the West in general, which still gives you most of the work you do) the pie is getting smaller, while the hungry masses who can do some syntax is getting larger in numbers - this leads to competition which puts pressure on prices (and customers who are also in serious financial situation are constrained to increase the pressure to unimaginable levels)

    Today, its a dicey tightrope walk amongst the CEOs and managements of IT companies - even the kind you are in. I know because I have many of my colleagues in leadership positions in these very same companies and talk to them regularly, and they tell me things they don't normally say in public! :D

    So, keep fingers crossed. And if my predictions of the next leg down comes even half true, that hike may not be so sure as there will be a downturn in absolute volumes and some serious bench and serious price pressures.

    cheers
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  • Originally Posted by wiseman
    Space,

    I too am in IT for the last nearly 25 years! :D No kidding!!!

    As you might have guessed, I am what one calls a "senior" IT guy (whatever that means).

    And you are right. Outsourcing is here to stay. But there are a couple of small problems ... especially with salaries being hiked as though its an God-given entitlement every year irrespective of circumstances ...

    1. Soon the cheap destination becomes costly without an equivalent improvement in efficiency, thereby making the overall cost increase in real terms, and

    2. The kind of deflation and work disappearing in the US (and the West in general, which still gives you most of the work you do) the pie is getting smaller, while the hungry masses who can do some syntax is getting larger in numbers - this leads to competition which puts pressure on prices (and customers who are also in serious financial situation are constrained to increase the pressure to unimaginable levels)

    Today, its a dicey tightrope walk amongst the CEOs and managements of IT companies - even the kind you are in. I know because I have many of my colleagues in leadership positions in these very same companies and talk to them regularly, and they tell me things they don't normally say in public! :D

    So, keep fingers crossed. And if my predictions of the next leg down comes even half true, that hike may not be so sure as there will be a downturn in absolute volumes and some serious bench and serious price pressures.

    cheers


    Wiseman, I conquer and concure :), I am too worried about the year to come. IT companies did everything to save money, cut operational costs in the last six months. Western economies are still shrinking, if situation don't improve then the last option left is rounds of layoffs.
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