Monday, January 26, 2009

Darode Jog opens bookings of Greenland County at Narhe Ambegaon, off Sinhagad Road at Rs.3,000 per sq.ft. in Pune Property Mahayatra Exhibition

2 bhk flat in 23.5 lakh!

27 flats booked!

Because Darode Jog Properties did not launch this project in Pune, you may feel like they are testing the market in the 'real economy' of Kolhapur. Which is less affected than 'IT economy' of Pune or Mumbai real estate market. But I don't think Darode Jog is using Kolhapurkars as gunny pigs. Because the fact is that though Darode Jog has not launched Greenland County in Pune officially, for the last couple of months they were 'soft selling' it in Pune..(!?)

At the site office of Crossover County on Sinhagad road, tentative layout and floor plans of the Nahre project are available for more than a month . Saleable area of 1.5 bhk flat (or 2 bhk as per the ad) is 716 sq.ft. (approx.) Proper 2 bhk is 874 sq.ft. (approx) and fits in the budget of 31 - 32 lakh. Budget of 3 bhk flat, approx 1250 - 1300 sq.ft. is around 43 lakh.

When Mr. Naik told me that he has booked 27 flats at Kolhapur, first thing what came to my mind was, "What would be the property rate when Greenland County will be launched in Pune?" At Ambegaon, most rationally priced flat at Kenjale Builder's Spring Meadows goes for Rs. 2,850 and 2,750 per sq.ft. Balaji Park, a small project in Ambegaon asks for Rs. 2,600 per sq.ft. Where as Amit's Bloomfield still quotes Rs. 4,200!

Is this booking at Kolhapur and other cities of Mahayatra, going to help Darode Jog to launch the Greenland County at Nahre Ambegaon at a much higher rate? I wonder!

What is your take on the property rates on Sinhagad road?

I hear lot of interesting views about the property rates on Sinhagad road in Pune.

Mayur Vankudre of Amit's Bloomfield says, "Property rates in Pune real estate market have come down only 'virtually' not actually!"

"Sinhagad road is not an IT neighborhood like Wakad and Baner. Here property rates are not going to go down any further!"

"Property rate at Darode Jog's Crossover County - possession in 6 months - Rs. 3,500 and at Greenland County -at planning stage - Rs. 3,000 per sq.ft.! Yes, generally affordable homes are more expensive!"

What is your take on the property rates on Sinhagad road? Please, share your views in the comments. (Comments Policy)

Should we keep Nanded City Pune out of this discussion? After all, it's an integrated township of 700 acres. What do you say?

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  1. Mr. Naik must have told today’s date is 27th.
    I am surprised to know that 27 flats for a property in Pune are booked at a rate of 3000 sitting in Kolhapur.

  2. What is their rate at Cross Over County? This loaction is 3-4 km from this site. Nanded City is now offering rate of Rs. 2750 for all older bookings irrespective of earlier rates (Slowdown effect). Is it then worth to book flat here at Rs. 3000 per sqaure foot?

  3. This is called the great Pune Builders Association : It seems they are not still aware that property rates are coming down and if they want to be in the market they need to cut the prices atleast by 25% .

    I think Pune builders still thing that its 2007 and they will quote whatever rates they want without knowing the reality ......

    3000 at Narhe ! ha ha ha Good Joke !!!!

  4. Property rate at Darode Jog's Crossover County is Rs. 3,500 per sq.ft.

    Possession is in July (Phase 1)and December (Phase 2, including amenities)!

    Yes, not only 3-4 kms away, it is in the village - Grampanchyat. Where as Crossover County is in Pune (in PMC) on the main Sinhagad road.

    Where as at Greenland County is a medium budget project. See the flat sizes and the project features.

    Nanded City Pune is a mass housing and an integrated township under special township act.

    So you can not compare Nanded City Pune with Greenland County or any small project in any part of Pune or in the fringe villages like Ambegaon Narhe, Wagholi or Bavdhan.

    You may compare Nanded City Pune with other integrated townships like Paranjape Scheme's Blue Ridge, Kumar Properties and Avinash Bhosale Group's Megapolis or City Group's Amanora Park Town.

    I say may because the ownership of the land and township is different in these projects. At Nanded City Pune and Amanora Park Town landowners own the development company and the the project. Where as though MIDC is one of the partners, it has given land on the lease to the project. And Blue Ridge is promoted by the company in which Paranjape Schemes is one of the shareholders and other partners are investment funds.

    Logically, property rates should have been much less than other types of projects!

    But if you see the pricing, there is a huge difference even in these townships. Point is there is only one logical explanation - property rates depend upon "how much buyers are ready to pay" Means only because you feel it's worth, property rate at Nanded City Pune is Rs. 2,700. (!)

    Is it worth to pay Rs.3,000?
    Darode Jog thinks so!
    You can disagree and tell the builder, in the negotiations, how much you would like to pay! Real estate rates are always negotiable!!

    Personally, i have not yet done the valuation of the project so can't say it's worth or not.

    Besides that, for me, important question is: Is it the right time to book in the project which at the conceptual stage?

    As a professional, at this point of time, i won't recommend to book, at the conceptual stage, in any project, by any builder, to anybody!

    (Even if Darode Jog were my client and are my friends, now my masters are those who want to book a flat. I blog for them, not for the builders.)

    Of course, you are free to take a risk!

  5. # ref: "if they want to be in the market they need to cut the prices at least by 25%"

    Yes, you are right! This is a general statement. We have to go by case to case, project to project.

    For example, there are couple of project who are comfortable (or not that much desperate,) with less number of bookings happening in the last couple of months.

    Because they already have enough bookings. Their project is at an advance stage of construction.

    In Pune, there are many builders who's ongoing projects are running own their own (financially) and they do not have work for their contractors. To remain in the market, they have to start a new project!

    These builders with less or no bookings can start a new project and complete part of it by investing their own funds. Particularly, if the land owner is a partner, initial investment is much less.

    They can demand and command property rate as per their calculations!

    Though majority property buyers agree with you and me about the rate, but if you see the number of home buyers who buy at a quoted rate (may be less by 100 or 200 rupees) is enough for these projects to start and keep on going.

    In Pune, majority of small builders are in this category. So, they can afford to think, as you rightly said, as if this is 2007!

    My point is, builder can think whatever they want to think but home buyers should start demanding more. Better product. Rational rate. Security of their investment. Because for a buyer risks are high!

  6. Ravi very well said !

    But I think, its high time the Pune Builders think rationally. They have earned so much that we cannot estimate .Now they are telling that the rate cutting is not possible,the profit they are earning is 15% blah blah blah....

    I think even today they earn more than 30% profit easily and that too on paper.IF you take into account the parking charges,MSEB and other charges which they take it comes out more than 40-50% profits...

    But still they cannot reduce price they say....Let all the people wait and wait and see the distress sale happening....

    One cannot ignore that this scenario will occur not matter what PBAP has to say... I am more worried about people who haven't got the possession of their house yet ...They are the one who will be hit most since all the project are getting deyaed by atleast 9 months...

  7. Who says Kolhapur econmony is booming?

    Kolhapur economy is hurting bigtime. Most of the industries in Kop are auto ancillary units which have no work.

    Kolhapur people will not pay these rates even if they have money. Even average Pune person can not pay such ridiculous rates.

  8. # ref: "I think even today they earn more than 30% profit easily and that too on paper.IF you take into account the parking charges,MSEB and other charges which they take it comes out more than 40-50% profits..."

    30 % - 40 % - 50 % (!?)
    Typing mistake! You forgot to type one zero! No problem!! Everybody can read it even it is not there!!

    Do you want to add all these charges to the property rate? Please, don't!!

    # ref: "But still they cannot reduce price.."

    Wrong expectation! When someone expects builder to reduce the price on their own, i find it amusing and unrealistic!!

    Forget about the builder, when you and me plan to sell our old flat do we think that i will sell it for the lowest price? or do we think rationally and expect to be paid as per the valuation report of the property? No! we go by the current market rates!

    Funny side is - when builder quotes a particular rate, it is nothing but pure assumption of how much you will be ready pay!!

    It is not exactly, cost + profit = selling price!

    It is : cost + profit + perceived value + margin for negotiation = property rate!!

    Property prices come down only when property buyers change their perception - perception about the location, amenities, brand, builder, time of booking - at a launching stage or ready possession , township or single building, walk to work or swim to work.

    Look what Montvert Seville did? It changed the perception about the size of the home and got a good booking.

    You may feel, i am taking side of the builders, not talking against them, not blaming them for the exploitation and preaching the buyers! But remember more than a decade i was in the profession of developing the property buyers perspective for paying high price for the property. This profession is called "real estate advertising and marketing!"

  9. Ravi very nice explanation given for negotiation on real estate.
    Buying real estate is purely depends on our bargaining power.

    I found Ravi's comments are very useful for buyer & he seems more like us now. Thaks Ravi for valuable tips & showing way to negotiate with builders.

  10. # ref: "he seems more like us now."

    Thanks for the complements!!

  11. Hello Ravi
    As an expert I need your help & comment on Kumar Park Infinia (Phursungi) & Kalpataru Screnety (Manjri)
    Kumar Park Infinia launched the scheme in June 08 with rate of Rs. 2500, while Kalpataru recently launched a scheme in Manjari with rate as Rs. 1950.
    I have seen both the sample flats, first of all there is a huge difference in the rate, and secondly I observed that Kalpataru Specifications are much more better then Park infinia inspite of low rates. Do you thing that park Infinia will reduce it’s rate?
    Both the builders are reputed but I am not sure about the possession date.
    Please can you throw some light on the above competition?

  12. # ref: "Do you thing that park Infinia will reduce it’s rate?"

    How can i say?

    But why do you want Kumar Properties' Park Infinia to reduce the rate?

    Basically, builders do not look at each other as a competition. Not like Kumar Properties and Kalpataru.

    Normal response, i expect, would be giving more importance to the location - how Phursungi is convenient - close to Hadapsar and Kharadi!

    Is this the reason behind your expectation?

    About possession date - no body - may be not even builder - could be sure!

    Sure, I will review and compare two projects if possible. I said if because, you can compare the concept and the plans but today execution - construction - you call it possession - is more important. Right?

    However, though Kumar Properties is smaller than Kalpataru - both builders have a good track record and capacity.

  13. Hello Ravi
    Thanks for your comments,
    What I understand from this Blog is that the pricing strongly depends upon the individual skill for negotiations with the Builder.
    May be Kalpataru is getting 50% margin & Kumar Property as 100%.
    But I still expect that PBAP should bring down the property prices in Pune Suburbs as they are still on the higher side. PBAP has not yet officially reduced the prices in any part of the city. (As compared to Bangalore, Mumbai Etc.)
    If PBAP dose not follow the market trend, then good Builders from other Cities (Kalpataru-Mumbai) will grow stronger in Pune as they know the market pricing & requirements better.
    If I am wrong please correct me!!!

  14. Rs.2200 rate in pimple saudagar
    Mr. Ravi do u think this is gud rate. they hav come down a lot from 3000 or more is yet to come

  15. # ref: "Rs.2200 rate in Pimple Saudagar"

    Good! But which project? What is the stage of the construction?
    Please, find out why he is offering this rate and share on this blog!

    At Pimple Gurav good projects are offering this rate but at Saudagar may be only Rama Group. Please, correct me or add your tips.

  16. Ravi,
    What new come suddenly the postings have dried up? I believe a lot more can happen in down time like if it can happen in boom time..Right?


  17. Government & Banks are trying their best to boost the real estate market.
    SBI has reduced the home lone rates officially to 8% (News in Sunday TOI)
    All of them are trying their best expect PBAP.
    PBAP is the only association in India which only runs their business for huge profits like 100% +++ margin & they don’t care for the real buyers demand.
    All good projects in Pune can sale the apartments below 2000 rate & still can earn a good profit of approx 50% +++ but pockets of PBAP are quite deep & will not satisfy by 50%!!!!
    Punekars do not have any option but just to wait and watch what PBAP will do in coming days.

  18. Hello Ravi,

    You had written a nice article on Nanded city with a special reference to Blue Ridge about two months back.

    Few days back there was nice article on Brand Paranjpe and how one can get back his money at Blue ridge after cancellation.(Long and endless wait)

    The calls for the first phase for allotment in Nanded city may be over. Do you have any upodates on actual bookings and cancellations there?

    Have they reduced their rates or still they are stating @ Rs. 3500 ( Which was the rate @ which they took final booking)

  19. Hello Ravi
    Please come up with some new blogs on current market situation, have the rates started comming down officially? Is PBAP diclaring low rates in current under construction projects?

  20. # ref: "Please come up with some new blogs on current market situation,"

    Yes, coming!

    # ref: "have the rates started comming down officially?"

    Yes, according to the builders but not as much as you and me expect because most of the builders don't need much more booking.

    # ref: "Is PBAP declaring low rates in current under construction projects?"

    Yes! PBAP is very happy to declare the low property rate of only 3,000 per sq.ft. in the fringe villages or in under developed areas of Pune. You know it!

    If you want low property rates, you have to help yourself! Negotiate and book only if you get lower rates!! Amen!!

  21. Ravi,

    You are making saracastic remarks against PBAP. Your remarks are well said. Hope PBAP member to read it.

  22. Ref: "If you want low property rates, you have to help yourself! Negotiate and book only if you get lower rates!! Amen!!" --very well said Ravi.
    I would like to share my experience here. Back in 2007(just a week after its lauch), I visited Crossover County on Sinhagad Rd. The sales ppl portrayed in such a way that, if i don't book it then n there I will miss the so called 'golden opportunity'. And considering the builders reputation I fell for it and was about to book at rate of 3400. But later I did survey and I came to know that same buider had offered much lower rate just a week ago for those who have much better negotiation skills :-)..So I tried to negotiate for 3000. Finally they agreed for 3200. In that moment, I was about to go for it thinking that in the whole transaction there is difference of only 1.5 lakh and I had liked the property. But somewhere in that booming market period, my own principles did not allow me to do so and I canceled my plan to go ahead. I felt that builder is not quoting the price genuinely. Today I really feel lucky that the transaction did not happen that time. I think the property was hyped unnecessarily. Today on SInhagad road there is only one property which is worth is Nanded city with 700 acre inbuilt township. No other property with 5,7 10 acres has the great benefits of townships. And in this gloomy period ppl should not pay more than 2000 per sq ft for good properties and 1700 for avg properties. There are lot more townships yet to come. Dont panic and fool yourself.

  23. what is area rate of narhe ambegaon