Hinjewadi First - The Last Straw!
|Hinjewadi First - Because we deserve it|
In the last couple of days, when no one asked me about the 'growth prospects' of Wakad and Ravet, i realized that Hinjewadi Industries Association (HIA) must have reprogrammed you all!
Now, you - IT professionals working in Hinjewadi - you have realized what you deserve.
Now, you have accepted the fact that no one - PMC / PCMC or Government of Maharashtra -on their own is going to improve the infrastructure for you.
Hinjewadi Industries Association (HIA) has programmed you all to fight for your rights. Fight for better infrastructure for Hinjewadi, as well as for Pune.
Now, you - crorepati software engineers in Hinjewadi - patrons of Pune real estate market - you are awakened!
Awakened property buyers is the last straw, which for sure, is going to break the back of Pune builders! For them reducing the property prices is the only way to survive!!
Interrogation and Analysis:
Obscene property prices, increasing home loan interest rates, exorbitant taxation had already hit the middle income group Pune property buyers. But builders in Pune were not worried. They have already stopped constructing homes for them.
Now, builders in Pune were focusing on 'higher middle income group' - the property buyers who can afford to pay Rs. 45 to 50 Lakhs for a 2 BHK Flat and Rs. 60 to 90 Lakhs for a 3 BHK Flat.
Mr. Satish Magar, president of CREADAI Pune was not the only one who believed that there are enough number of property buyers - mainly IT Professionals - who can afford to pay these property prices, taxes and EMIs.
Pune builders also believed that this chunk of prospective property buyers was dumb too! Pune builders thought that just by releasing colorful ads in the local news papers, we can trick Pune property buyers to pay not only booking amount but 20% own contribution for the projects which haven't received necessary sanctions.
For a while, banks are not ready to give project finance. Foreign Direct Investors are withdrawing or retiring. There are not enough subscribers to Initial Public Offering (IPO) at the share market. Debt ridden builders are desperately trying to sell the land parcels to generate cash. For example, Kumar Builders (Kumar Urban Development Ltd.).
It means that, for Pune builders the property buyers are the only source of funds. Interest free funds.
However, we all know that this old trick of Pune builders didn't work at all. Forget about the bookings, most of the recently launched projects in Pune, didn't even get enough site visits!
Even, the current favorite of IT Professionals working in Hinjewadi, Tropica, the blessed township at Ravet PCMC, received 'less than expected' site visits and bookings on the day of the launch, Mr. Satish Kishtikar, Marketing Manager, Om Developers, told me other day.
"If this was the initial response, then how come around 200 flats in Tropica were booked in the next 2 weeks? What is the secret of Tropica's huge success?," i asked Satish.
"Because, Tropica Ravet passed the test with flying colors!," Satish said and told me the major changes he had noticed in Pune property buyers.
1) Booking at the launch or pre-launch stage of the project - major reason for the property price rise is out of fashion.
2) HR Departments of IT companies and their associate brokers have stopped brainwashing and sending software professionals to the builders.
3) Property buyers have lost trust in the Pune real estate advertising.
4) Now, the property buyers not only ask the questions but interrogate the sales persons.
5) The IT Professionals take time to critically analyze the different offers.
6) Pune property buyers have stopped believing in the promises of proposed D. P. Roads - BRTS - flyovers - bridges.
7) Pune property buyers have started questioning the worth of the property which doesn't have minimum infrastructure - approach road, water and electricity.
8) There is no more "desperation" to own property!
9) There is no more "fear" of property price rise! As if, all property buyers have realized that if they don't book or take more time to book the property rates, actually, come down. Like, it happened last time.
10) There must be some agency which secretly rates the right time to book in a particular project! Mostly, they access the track record of the builder, evaluate the concept of the project and decide whether one should book at the launch, at 'almost ready for possession' stage or only after the project receives the 'completion certificate' from the municipal corporation!
A few days ago, Milind Jhamvar, C.A., invited me for a chat with the core team of V B Associates, one of the leading DSA of HDFC Home Loans in Maharashtra.
While exchanging tips about effects of increasing home loan interest rates and out of control inflation, Milind claimed that Pune property buyer has stopped thinking about how much maximum home loan he can get!
Now, Pune property buyer has started thinking about how much maximum EMI he can afford to pay! Now, "repayment" has become more important than the "budget"!!
"Ravi Karandeekar, it's no more location...location...location! Now, 20-28-36 is the most important rule in Pune real estate market!," Milind said and suggested that i should ask one question to everyone who calls me on 919860044110 for the 3 minutes free consultation about investing in Pune real estate market.
From that day, i started asking every property buyer - "Do you have a sanction letter from housing finance company?" - "Is your home loan sanctioned by a bank?".
You know what? Majority of the property buyers had a sanction letter!
These property buyers were more concerned about the repayment than the eligibility for the home loan.
These property buyers were not searching for a 2 BHK Flat in a particular location.
These property buyers were ready to go to any project where they can get a property which will fit in 20-28-36 rule.
20 per cent own contribution.
28 per cent of gross annual income for the annual payments towards mortgage, insurance, maintenance, property taxes payment.
36 per cent of gross annual income for monthly house hold expenses and for other monthly payments like credit cards, car and other monthly installments.
Obviously, keeping in mind the increasing home loan interest rates and increasing high cost of living these property buyers are buying 35 - 36 Lakhs 2 BHK in Tropica Ravet than 45 - 50 Lakhs in Balewadi. Compact 3 BHK Flat for 45 Lakhs than 60 lakhs in Wakad. Luxurious 3 BHK Flat in 21 Story Sexy Sangria Towers in Megapolis Hinjewadi Phase 3 than in Baner.
Because, in the next 15 years, they want to maintain their standard of living, pay EMIs regularly and give best possible education to their kids.
This new "EMI Consciousness" proved that Pune builders' assumptions are completely wrong.
Pune property buyers are not dumb to buy a property at any price because they are eligible to get that much home loan.
Now, Pune property buyer is focusing on balancing his financial plan than over stretching to buy a 'dream home'.
Point is, 'awaken' - 'enlightened' - property buyer of today is more dangerous for Pune builders than the 'threatened' 'unsecured' IT Professionals of the last real estate doom.
So, don't you think that property price correction in Pune real estate market is inevitable?
1) MONDAY, JUNE 13, 2011
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