Thursday, August 31, 2017

Immediate impact of MahaRERA & GST on Pune flat buyers

Observations at Times Homes for All - Pune's First Post GST & Post RERA - Property Expo & Sakal Vastu - MahaRERA Registered - Property Expo on 26th & 27th August 2017:


The Times & Sakal Pune property exhibitions were sort of testing grounds.

After the implementation of GST & MahaRERA, some builders in Pune - who feel that they can complete their ongoing under construction projects - were testing their new sales tools & strategies.

On the other hand, some flat buyers in Pune - who are still interested in booking a flat in under construction housing project - were testing exact benefits of MahaRERA & GST.

1) As Usual - Area Specific Property Exhibition:



I visited both exhibitions. Talked to salespersons and a few flat buyers. As usual, according to the venue of the property exhibition - participating projects & visiting flat buyers were from surrounding areas.

Means at the Times exhibition at Orchid Hotel - mainly participating projects were from Bavdhan, Baner, Balewadi, Pimple Saudagar, Punawale etc. and visitors were mainly from IT companies in Hinjewadi.

At Sakal Vastu, Karve Nagar in Kothrud - participating projects were mainly from Sinhgad Road and the areas near Kothrud - including Bavdhan Budruk, Bhukum, Pirangut etc. Same about the visitors - they were mainly from Sinhagad Road & Kothrud.

It means that - location - area - was the focus of exhibitors & visitors. Not MahaRERA! Not GST!

Does it mean that MahaRERA failed to motivate the flat buyers to book the flats in the under construction projects - which was the main intention of RERA?

Does it mean that while buying a flat people still give more importance to the familiar location over the protection & transparency offered by MahaRERA?

Does MahaRERA mean a lot only to the builders and the government - like GST matters only to the traders & the tax collectors?

Did Pune flat buyers realize that 'RERA - Protecting Interest of Flat Buyers' is just a slogan - like 'GST - One Nation. One Tax' - to create false impression that the government bothers not only about foreign businesses but also about the Indian citizens?

What is your guess? Please, share your views in the comments.

2) Just a Property Exhibition. Not a Revival of Pune Real Estate Market:



The salespersons at both the venues told me that the 'crowd' was 'moderate' but 'genuine' & 'serious'!

(When less number of people visit the exhibition they are always labeled as 'serious buyers'. Why? Because real estate salespersons are trained to believe in 'Positive Thinking'. 'Being realistic' is considered as unprofessional.)

A few projects at Sakal Exhibition - Karan Group's Suncoast at Bavdhan Budruk and Rawat Realty's Madhuli - got a booking.

After a long gap, Pethkar Projects participated in Times exhibition at Orchid and as usual, wise Hinjewadi flat buyers took trouble to visit the site of Siyona at Punawale.

If you only focus on these incidents - you may feel that the learned real estate consultants' prediction - "After GST & MahaRERA Pune real estate market will revive!" - was right.

But this is an exaggeration. These few site visits & bookings were exceptions. These happened because of the skillful salespersons and the good qualities of the projects. And of course, because of the couple of over enthusiastic & impulsive flat buyers.

Like these 'learned real estate consultants', I don't work for the builders. That's why for me whether the builders get a good number of bookings or not doesn't matter.

For me, what matters is - A buyer should be able own a flat within his budget and at his prefered location. That's all.

That's why I am not compelled to create 'positive sentiments about booking a flat'.
Like one salesperson at Sakal exhibition suggested me.

Or it's not my job to motivate a 'sitting on the fence' flat buyer to book.
Like one salesperson instructed me, "Ravi Karandeekar, do write this on your blog - after GST & RERA property prices haven't gone down - in fact - prices have gone up and may keep on going up - so stop waiting and start booking!"

At the same time, I don't want to spread wrong ideas among my readers in United States, Canada, Brazil, United Kingdom, Germany, Norway, Poland, Ukraine, Russia, France, United Arab Emirates, Australia, Singapore & China. And of course, Mumbai, Navi Mumbai & Thane in Maharashtra. They consider my blog as a reliable source of information about buying a home in Pune real estate market.

So, my 'Pune flat buyer centric' observations about the immediate impact of MahaRERA & GST are -

3) What is the actual size of this flat?


A Flat Before MahaRERA
A Flat After MahaRERA

Every visitor to the exhibition noticed that the 'area statement' of the flat was very different. There was a new column in the area statement which created a lot of confusion. It is called "Enclosed Balcony"!

What is "Enclosed Balcony"? I know about the "Carpet Area", "Dry Terrace / Balcony" and "Attached Terrace". But I have never heard about "Enclosed Balcony"! What is it? Where did it come from? Everyone was confused.

Pointing at the new & revised floor plan, salesmen were explaining -

"Look at this bedroom.
This line shows that this much area was not actually a part of a bedroom.
It was not a part of a carpet area.
It was a balcony.
While sanctioning the plan this balcony was - officially - merged into a bedroom so that you can get a bigger bedroom.
Enclosing balcony and merging it into the bedroom was the standard practice.
Because of the MahaRERA we have become 'transparent' and
we have started showing it in the floor plan and mentioning it separately in the area statement. That's all!"

"It means that for so many years you were hiding this from the flat buyers. The carpet area you were mentioning was actually not the carpet area of the flat. You were adding water to milk and selling that adulterated milk - you were cheating the flat buyers!," said a visitor.

"Cheating! No!! It was the standard practice. The government knew about it. Builders were paying premium to the government to enclose the balcony!," said the salesman.

"Government and builders are always hand in glove. Now, tell me what is the saleable area of my flat?," asked the visitor.

"There is no more saleable area. No more loading. Only carpet area, enclosed balcony, dry terrace, attached terrace," said the salesperson.

"Okay. But what is the actual size of my flat?," asked the visitor.

"Area of your flat is mentioned here - in sq.ft. as well as in sq. mtrs. - carpet area, enclosed balcony, dry terrace, attached terrace," said the salesman.

"I saw that. But my question is - what is the actual size of my flat?," asked the visitor.

"Area of your flat is mentioned here - in sq.ft. as well as in sq. mtrs. - carpet area, enclosed balcony, dry terrace, attached terrace," said the salesman.

"If I add all these numbers - would it be the size of my flat?," asked the visitor.

"Why do you have to do that? Area of your flat is mentioned here - in sq.ft. as well as in sq. mtrs. - carpet area, enclosed balcony, dry terrace, attached terrace," said the salesman.

"What is your problem? Why are you not telling me the size of my flat?," asked the visitor.

"I don't have any problem. I have already told you the size of your flat - in sq.ft. as well as in sq. mtrs. - carpet area, enclosed balcony, dry terrace, attached terrace - Exactly as per RERA Act of 2016 & MahaRERA Circular 4/2017 dated 14.06.2017!," said the salesman.

4) What is the per sq ft rate of this flat?


Everything which is sold and bought has a rate! Petrol has a per litre rate. Potatos have a per kg rate. Ola has a per km rate. Even I am paid at the rate of rs xxx per hour. How come only property doesn't have a per sqft rate?

At one stall I heard this conversation about the property rate.

"What is the rate?," the visitor asked.

"No saleable area. No per sqft rate. Now it's a package. Agreement Cost + Stamp Duty + Registration Charges + GST 12% = Total Cost That's the package!," the salesperson said.

"Okay. Explain the Agreement Cost. You must have multiplied sq ft area with the per sq ft rate and added infra charges & something in it. Right?," the visitor.

"No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"Does it mean that there are no infrastructure charges - no development charges - no parking charges - no mseb charges - no society formation charges - no club membership charges - anymore?," the visitor.

"No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"What all I want to know is - Are there any other charges added in this agreement cost besides area into rate?," the visitor.

"No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"Why are you not telling me the per sq rate?," the visitor.

"Because there is - No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"I have a calculator in my mobile. I can divide this agreement cost or total package cost by the area and find out the per sq ft rate. If I can do it - why don't you it and tell me the per sq ft rate of the flat? Don't you have a calculator in your mobile?," the visitor.

"I have a mobile. There is a calculator in my mobile. But now, there is - no saleable area - no per sqft rate. Now it's a package!," the salesperson.

"There may not be a saleable area. But there is a carpet area. Right? I can divide total package or agreement cost by the carpet area and find out the per sqft rate! Isn't it?," the visitor.

"Why would you do that? Now you know that there is - No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"Everything which is sold and bought has a rate! Petrol has a per litre rate. Potatos have a per kg rate. Ola has a per km rate. Even I am paid at the rate of rs xxx per hour. How come only property doesn't have a per sqft rate?," the visitor.

"After RERA - No saleable area. No per sqft rate. Now it's a package!," the salesperson.

"You are creating confusion! Wasn't RERA supposed to bring transparency?," the visitor.

"This is transparency - exactly as per as per RERA Act of 2016 & MahaRERA Circular 4/2017 dated 14.06.2017 - no saleable area - no per sqft rate - only package!," the salesperson.

5) What about GST?


Entire 12% GST Discount!

Another hot topic was GST - Goods and Services Tax! Most of the visitors realized that GST on property was not a good and simple tax at all!

Mantra Properties was offering - Entire 12% GST Discount - of course, for the limited period only!

Whereas one builder was promising to give away Rs. 3 Lakhs as ITC - Input Tax Credit - down the line.

One builder was promising to reduce Rs. 3 Lakh as ITC from the agreement cost and then you have to pay 12% GST on that discounted agreement value.

Whereas in their property price list of Siyona at Punawale, Pethkar Projects had mentioned the amount of GST - after discounting the Input Tax Credit (ITC)! You know? Pethkar Projects is passing on 6 % Input Tax Credit to the "eligible" flat buyers!

"GST Only 5.5%! Save upto Rs. 300 per sq ft!!" - Pristine Properties had come out with a limited period special offer on GST for Pristine Prolife at Wakad, Equilife at Mahalunge, Pristine Greens at Moshi.

Otherwise there was a huge confusion about GST. Mainly because of the distrust about the builders. We know that before giving 12 % discount a builder increases property price by 15 per cent!

6) Buy Property Blindly:


Pristine Buy Blind Assurance

After visiting these exhibition, I was almost convinced that the builders in Pune have taken a collective decision to create confusion among the flat buyers.

What was the intention?

Dishonor MahaRERA!

To prove that instead of bringing in transparency - MahaRERA has created ambiguity & complications. MahaRERA has made simple things complicated.

What would Pune builders achieve by discrediting MahaRERA? - You may ask.

Discourage the flat buyers from taking informed decisions.
Pune flat buyers, don't bother to visit the website of MahaRERA.
Pune flat buyers, don't bother to check the project's documents - sanctions - approvals on MahaRERA website.
Instead of that "Trust the Builder". Blindly. As you were doing for years.

Pristine Properties' "Pristine Buy Blind Assurance" puts it in clear words.

Pristine says - "Transparency is the right of every customer. Which is why Pristine Homes' hand-on-your-shoulder assurance of trust and reliability brings you Pristine Buy Blind Assurance."

What it means? Let the MahaRERA go to hell. Trust the builders in Pune. Keep on buying homes blindly. Like you were doing for years.

What say you?

Do you trust the builders in Pune?

Is it safe to buy blind?

Do you think that MahaRERA would help you to take informed decision?

Please, share your views in the comments.

Related Story:


1) How to deal with your childish and selfish parents - Tips for Hinjewadi IT Engineers

Times & Sakal Exhibition Photos:




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