Monday, March 14, 2016

In 2016 - where to book a flat in Pune real estate market? (Part 1)

While booking a flat - "Location" - is not the one & only parameter!

Wipro Hinjewadi Pune

Nowadays at least those who call me on 91 98600 44110 know that along with location - there are many more things to consider - while booking a flat in Pune real estate market.

In 'many more things to consider' mostly they want to know from me - 1) Track Record & Reputation of the Builder 2) Development Prospects of the Area 3) Potential of Appreciation.

For example - Ms. Dipika - not her real name - has shortlisted Western Hills at Baner. Dipika wants to know -
1) The Track Record & Reputation of Atul Enterprises, the builder of Western Hills
2) Development prospects of Sus Gaon
3) How much her 70 lakh rupees 2 BHK Flat will appreciate in the next 5 - 6 years

Dipika's voice tells me that she is beautiful. Her tone tells me that she has liked this flat very much. Emotionally she has made up her mind. But her rational mind has ordered her to seek my opinion before making a decision.

Now, tell me, in this situation - how can I say anything negative about a builder - about Sus - about property appreciation? I am not a heartbreaker!

Ravi, if your honest opinion breaks Dipika's heart - not you but the builder is responsible! Why didn't the builder answer her questions? Sharing authentic information would have been helpful for him to get her booking! I said to myself.

Dipika, did you visit the website of Western Hills? Didn't you find replies to your questions on it? I asked.

Western Hills website only has a layout, plan, list of specifications & amenities. Yes, and a few words about the builder & his 2 sons. Dipika said.

You know why? I asked.

May be they have something to hide. Dipika said.

Means you got answers to your first 2 questions - about the builder & Sus Gaon. Right? I said.

Sort off! But what about my third question - property appreciation? Dipika asked.

Are the property prices published on the website of Western Hills? I asked.

No! Dipika said.

Why? I asked.

Because their rates are negotiable. Instead of 5,950 - after negotiations - I got a rate of 5,330. Dipika said.

Are you the best property price negotiator in the world? I asked.

No. I am not. Dipika said.

Means, someone who is better than you would have got 5,000 Rs. Per Sq. Ft.! I said.

May be. But 5,330 is good. Isn't it? Dipika asked.

Why do you think so? I asked.

Considering the location & comparing with the rates in Baner - 5330 is good & fits in my budget. Dipika said.

Still you don't feel safe to pay this price. You have liked the flat & the project. You can afford to buy. Still you are not sure. Right? I said.

This is my first flat. Obviously, I am less confident. Dipika said.

Let us see what would have given you confidence. Wouldn't it have been better - if Sus Gaon had a development plan? I asked.

Certainly, yes! Development plan would have told me about the future prospects & potential of appreciation. Dipika said.

And if the builder had published terms of transaction - his policies - the procedures he follows - would have you asked about his past? I asked.

No. Why would I? I am interested in the present. Dipika said.

That's the problem! You are paying for the service. But the builder - the service provider - is avoiding to announce & accept - terms, conditions, policies, rights & responsibilities - up front. That's why you are not sure about booking a flat in Western Hills. I said.

Do you mean to say that should I drop the idea of booking a flat in Western Hills? Dipika asked.

That's your call! Now you have realized that lack of well defined terms of transaction between you & the builder is preventing you from booking. Why don't you suggest the builder to publish these on his website? I said.

It's his business! Why should I bother to tell him? Dipika said.

Who sets the service rules in your company - employee or employer? Employer. Right? In this transaction - remember - you are the employer - the paymaster. The builder is a service provider. Seva de ne wala. Your employee. Obviously, it is your responsibility to tell your builder - how he should provide the service! I said.

You are making things complicated. I don't have time to teach the builder. Tell me - in simple words. Should I go for it or not? Dipika was annoyed & angry.

I can make it simple. Find the builder who has well defined terms of transactions! Location & budget are the parameters to shortlist the projects. Not the parameters for booking. For booking the builder who has published well defined terms of transactions is the criteria. Got it? I said.

You suggest the name of the builder who has well defined terms of transactions! Dipika said.

Sorry. I don't know any. I said.

Then what? Dipika asked.

Tell the builder - how he should serve you! I said.

You do that! And let me know when you make or find one. In the meantime, I will go for a resale or a ready possession flat! Dipika said.

That's less risky. Better than booking. I said.

Yes. Adoption is better than giving a birth. Dipika said.

The Terms of Transactions Between a Flat Buyer & a Builder:

If you see my blogs on the problems between the builder & the flat buyer - you will realize that - no transparent terms of transactions between the builder & the flat buyer is the root cause of majority of complaints. For example -

No clarity between club membership & flat possession was the reason for my blog - The Crime at SKYi Songbirds Bhugaon

Hiding information about Environmental & Aviation Clearances was one of the reasons contributed in creating mistrust about the builder in The Case of Suyog Nisarg at Wagholi, Pune

Lack of cancellation policy was the reason for my blog - Is Vastushodh Projects a Trustworthy - Reliable Builder?

What say you?

Don't you think that - before making a decision of booking a flat - you must know the terms of entire transaction - from booking to conveyance - between a flat buyer & the builder?

The publicly announced transparent terms of transactions is the most important parameter to decide whether to book a flat or not.

I have made up mind - in 2016 - I will recommend only those projects which have - transparent terms of transactions. If we all insist, someday, for sure, all builders will become transparent & publish the terms of transactions.

Please, share your views in the comments.

Related Stories:

3) In 2016 - where to book a flat in Pune real estate market? (Part 2)

2) In 2015 - Where to book a flat in Pune real estate market?

1) Pune real estate market research report, trends & forecast 2016

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  1. sharing this link again so atleast people know where NOT to buy in 2016 :)

    1. Agree with you completely but even if 1 person is saved from getting cheated by builder, it's worth the efforts !
      And it's clear that you too hate these dumb buyers equally as crook builders but even in this hate, your help is seen from the post :)
      If Ravi can take so much efforts, we can atleast share, right ?

      "We don't have quality of life in main city & they are thinking of buying in grampanchayat area.Fools these area are supposed to be used for farming not residence."

      Who talks about quality of life ? Most talk either about EMI or appreciation. Assure them 100% return every year & they will stay even in pipe ! LoL.
      See how cities far better than Pune are having 50% the Pune prices !

      Pune is expensive than Bangalore, Kolkata, Hyderabad, Ahmedabad. Infact, property prices in Hyderabad & Ahmedabad is 50% that of Pune despite having better infrastructure. Shows how hyped up Pune prices are without any accompanying infrastructure.

      Pune is now 4th most least affordable city & stands behind Mumbai, Delhi & Chennai.

      No point in buying in Pune unless prices fall by atleast 50% which is evident from charts mentioned in the link.

      "Invest your money in CM relief fund or spend them on a bar girl in a dance bar instead of selling your peace of mind."

      Haha, can't agree more. But please don't compare bar girls with builders as by doing this you are insulting bar girls.

    2. "No point in buying in Pune unless prices fall by at least 50%" - I completely agree!

    3. My post above is for reply to Querty1 below. Please read it accordingly. Sorry for inconvenience.

    4. The system is currupted from head to toe & As per my study real estate market in India works like this -

      We don't have less land at all.We has very less supply of zoned lands.
      The politicians restrict the supply of proper zoned lands for development.
      They also restrict the FSI on land citing bad quality of infrastructure so as to maintain population density in that area!!!
      On top of that as the land dealings work mostly on cash dealings,they hold the most of the land for obvious reasons.
      The Builders also take money from them on huge interest for construction.
      Fact- The currupt politicians are squeezing each drop of blood from the citizens of India.
      Builders are very small part of it.Even this system puts them in a situation like be a crook or perish.
      The biggest culprit for all of this is the party which ruled us for 60 years.I think the current government is working for good of this country but I am yet to see the results.You can't take each & everyone to the jails on corruption charges.We are all currupt.The shitty politics of our ex.rulers has created a system called ' Be currupt or perish'.
      The ordinary citizens are living only & only as slaves of this system gifted to us by our politicians especially our rulers for last 60 years.

    5. "The biggest culprit for all of this is the party which ruled us for 60 years.I think the current government is working for good of this country but I am yet to see the results."

      - Agree but understand that the garbage created in 60 years can't be cleaned in 2 years. Atleast current Govt brought RE regulator despite being minority in Rajya Sabha. Why did previous Govt didn't do this when they could create IRDA, TRAI etc ? So let's give some time to current Govt, it's not just real estate per se but they are fixing complete rotten economy.

      "The ordinary citizens are living only & only as slaves of this system gifted to us by our politicians especially our rulers for last 60 years."

      - Can't agree more. But henceforth, we can atleast ensure that future won't be the same as past & work towards making this country a better place to stay.

  2. Dipika is in confused state of mind & you know what happens when someone drives in confused state of mind ? Either they loose their way or meet with an accident.

    See her 2 sentences -

    " This is my first flat. Obviously, I am less confident. Dipika said."

    "How much her 70 lakh rupees 2 BHK Flat will appreciate in the next 5 - 6 years"

    Financially, she would have also asked -
    Can her 70L 2BHK flat price can also become 30-35L in coming time ?
    Dipika seems end user suffering from investor syndrome !! If she is end user, she should have asked what development would take place in this area in next 5-6 years & is it worth buying here than renting at superior place at far cheaper cost.

    With people like Dipika in market who don't have clarity of mind, it is so easy for builder to make these dumb people fall into their trap. Words may sound harsh but I like to speak straight to the point. These people should write a book -

    How to get cheated despite knowing the cheater !! LoL.

    Good that Dipika contacted Ravi so conclusion was to go for a resale or a ready possession flat.

    And one more latest case of builder cheating, as usual. Now this cheat builder got stop work notice due to irregularities & dumb property buyers are stuck.

    Green tribunal orders 'stop work' for Sinhagad Road highrise after its fails to comply with mandates for environmental clearance :

    1. 1) "How to get cheated despite knowing the cheater!!" Perfect!

      2) Thanks for sharing the link!

  3. I really wonder why the writer & The Monk is trying to educate fools for free.I am damn sure this lady is totally unaware of even the carpet area of her flat,leave aside the legalities.These people should be taxed so high that instead of getting robbed their money can be used for infrastructure developement.Our country is full of people who think that property rates appreciation is a sign of economic growth.They should look at how the black money infusion in economy has lowered. Why jewellers are unhappy over excise & reduced cash limit.How the rates will appreciate?Use common sense.We don't have quality of life in main city & they are thinking of buying in grampanchayat area.Fools these area are supposed to be used for farming not residence.
    Invest your money in CM relief fund or spend them on a bar girl in a dance bar instead of selling your peace of mind.

  4. Kindly write a blog on Real estate bill with its effects on buyer security,builder's responsibilities,overall development of sector & whether to buy at current rates or not.Tell us how the regulator will actually function.
    Would love to hear your views.

    1. 1) Yes, huge positive response to the Regulator is amusing. However, I prefer to write about what happens in the real world.

      2) Still I can try to write about the Regulator. Because I do not have to spend much time on it. With some minor addition I can easily recycle & republish these 2 blogs I have written in July 2012.

      A) Maharashtra Housing (Regulation and Development) Bill 2012 - "It's a Trap!" -

      B) Maharashtra Housing (Regulation and Development) Bill 2012 - "The Trap is Set!" -

      3) You can visit this link - published in March 11, 2016 - to know what happened to Maharashtra Housing (Regulation and Development) Bill 2012

      A) Maharashtra housing regulator to be a reality by mid-April -

      B) Maharashtra: Real Estate Bill nullifies key provision in state Act -

    2. Ravi,

      It will be be fantastic if some interviews with eminent persons in consumer rights like Vijay Kumbhar, Vijay Sagar etc. are to be interviewed with their thoughts on new real estate regulator. But one thing is sure that crook builders are going to get sleepless nights now.

    3. Yes, TheMonk! Fantastic idea. I will interview them.

    4. Thank you Ravi.

      Cheer for home buyers! After Rajya Sabha, real estate regulatory bill cleared by Lok Sabha as well :

    5. But I think this time they are serious.'Ghada bharla' ahe.Uss mulapsun nai tr tyakhalchi mati pn khalli ahe.Now even if they don't want to,they have to work for the country.Please read my above comment as a reply to TheMonk.

  5. Replies
    1. The above photo was shot on Canon PowerShot SX60 HS. Now I use - Canon 70D & Samsung Galaxy.

    2. Thanks for reply, i wanted to know about camera that you use to capture video...

  6. Ravi, Monk can someone explain how the prices will fall by 50%. Qwerty1 has already explained about the nexus. One more thing that I want add here pune is heaven for northis and non pune maharashtrians don't have any option ...these crooks knowing about these facts. Compared to other city builders, holding capacity of builders here is high. Also pune is education, auto, pharma, IT hub and so on... unless and until other cities such as Nagpur and Indore gets developed in all such area...its difficult to see fall in demand... how will prices drop by 50%?

    1. Answer is simple -

      Make a list of what are reasons for current high prices ? Are those factors relevant today ? If not, how will it support current prices ?

      Is Pune infrastructure the 4th best in the country ?
      Is average income of Pune prospective home buyer is above 25L/annum ?
      Are new jobs offering starting salary of 12L/annum so as to buy even in remote areas ?
      Is IT situation same as it was 5 years back with double digit increments & on-site work ?
      How much does manufacturing sector offers salary ? (I am not talking about salary of CEO, MD etc)
      Education is there but how many students buy flat ?
      How much new black money is being generated & put into real estate ?

      And if holding capacity of builders would indeed had been high, why are builders in Pune going bankrupt as seen in several Ravi blogs in past 3-4 months ? Actually, it was not builder holding capacity but politicians black money which was helping builders. Now that previous corrupt Govt is out of power, fresh inflow of money to builders is not coming. Just see the number of guntha-mantris builders in Pune. Were these builders or politicians ?

      Those who could buy earlier have already purchased while those who joined job market say after 2008 are completely priced out of the market.

      Earlier, the difference between EMI & rent was minimal so it made sense to buy, today 2 months EMI takes care of yearly rent !

      Incase of official financing (white money), several builders would have been bankrupt in 2008-09 but thanks to bailout by banks by restructuring the loan, they managed to stay afloat but today, the banks themselves need bailout, so from where will they help builders ?

      Check this report of Sep 15 :
      Pune’s real estate unsold inventory reaches to 2.8 lakhs units :

      If we consider 4 people in one flat, these flats can cover almost 12 lac people ! Inventory level will increase even further by end of this financial year. If demand was strong, why is number of unsold flats increasing ?

      To sum it up, current high prices were account of :

      1. Artificial demand, mostly an illusion created by builder-media nexus,
      2. Cheap financing (black money & white money both)

      In absence of above points coupled with no genuine demand due to high prices, there is no other option but for realty prices to crash especially in city like Pune. Builders going bankrupt is biggest symptom of coming things to happen in real estate.
      If you think I have missed something, do let me know.

    2. First we need to look at parameters which were responsible for high property prices - Booming IT sector, very less difference between rent & EMI, cheap access to credit for home loan borrowers & builders, double digit increments YoY, large scale investors in Pune, black money - from politicians as well as investors, high rate of appreciation YoY & in 2008, post US sub-prime crisis, bailouts of builders by banks (thanks to previous Govt) which made them held on high prices & artificial cheaper home loans by banks like SBI (remember teaser rates ?) to indirectly help builders.

      Come to 2016 & see how many factors mentioned above still exist. IT sector saturated, salary increment is negligible, on-site is very difficult, difference between rent & EMI is very, very high, credit to builders has almost dried up, due to high prices, eligibility of borrowers has fallen as incomes haven't catch up with property rates, with new norms of RBI, banks can't lend below base rates which means no more teaser rates, banks themselves are looking for bailout due to high NPAs, so they don't have money to bailout builders anymore, Govt has changed so new inflow of black money in real estate has dwindled, creation & investment of black money has become very, very difficult (see how jewelers are currently on strike for past several days), with no or rather negative appreciation, the existing investors are stuck while new ones are not coming.

      Several Pune builders going bankrupt is a clear indication of things to come. Add to it the already high amount of unsold flats, the pressure to crash prices increases further. Not to forget, with new real estate regulator, things are going to get tough for crook builders. Builders now can't simply launch project without an intention to complete them. Earlier they launched project & used that money to stay afloat even if it means delaying project by years together. This won't be possible now.
      Some useful links :

      Better to rent than to buy :

      Bogus economics: Black money, real estate and tax havens -

      Property experts said this will push builders to pay by cheque when buying land, reducing the flow of black money in the sector.

      Slowdown hits Pune real estate, unsold inventory up 56% : Read the comments below in news article.

    3. Dear Enigma, home buying is funded by the housing finance companies & banks. Means it is funded by digital money. Banks can increase or decrease the digits as per their convenience. So, real estate prices can go up by 50% - 100% - 200% or come down by 50% - 80% - 90%. Crash of economy is an opportunity - not a tragedy - for the banking industry. In the last 200 years entire world has seen this this.

    4. Thanks for the reply Ravi sir. Though d world is in recession prices in other cities have collapsed like in delhi ncr and stagnant in south as it is already lower their, pune prices have not fallen. I am not a active in RE but I hear from friends relatives that no one is ready to negotiate even d investors. When you say prices should fall, means thr is recession or no easy money in market, but prices have not fallen. Now prices can only fall when demand will fall. For that reason few things need to happen. New cities not 100 only 3/4 needs to be developed immediately so that "londhe" can b diverted 2 these places then only there can be major fall.
      About banks including central bank r biggest crooks they r only responsible for all this mess. They also don't know when thr greed is gng to end. Finally only tax payer gets screwed here.
      one more thing management people of IWS section r so fond of properties that thr lust for multiple flats is not gng to end. Actually thr is competion among them who owns more. So tell me when prices will fall.

    5. Enigma,

      I have posted 2 detailed posts with all statistics, but it has not been published. Don't know why :/

      And do read this :

  7. Hi Ravi,

    Can you please let me know your view about Karia Builder and its upcoming project Krest at Undri.

    thank you in advance.

    1. Sorry. No. At this point of time - I am focusing on the projects in PMC & PCMC to cover the backlog.

    2. Are there any builders in pune who insure their customers from leakages, cracks in Pune. Shall conveyance be the last stage of completation of transaction with builder instead of mere possession?

  8. Hello Ravijee. I'm following your blogs closely. They are very good and I'm sure many people can save themselves from cheating after reading and understanding it.
    After a long search and research I bought a property at Kalpataru,Harmony.
    But I'm really freaking out with the news of recession,slow down and all.
    Do u think Kalpataru is still a trustworthy?? And do That property has potential to grow. I have invested a lot in it!!!��

  9. Hi Ravi,

    I am planning to buy 2 BHK or 3 BHK at kharadi Pune.... Please suggest best property and what is per square feet rate in Kharadi because builder say it's 5600 - 5800... What is best rate I can get ?

    2 BHK budget = 50-60
    3BHK Budget = 60-70


  10. Hi Rajeev sir,
    Thankyou for the knowledge you have posted.
    I have booked a flat at handewadi in a project of 400 flats. Have booked this flat with lot of trouble in the term of finance. After reading your blogs I was scared of being dumped so I decided to cancel my booking and go for land with 1000 sqft wherein I can build a house of almost same amount which I have booked for 1 bhk in the project which was for 625 saleable and only 455 carpet area. Request you to please advice.

  11. Hi,

    I have shortlisted a property in Dhanori - Krishna Aeropolis by Krishna Developers. It's a top floor (11th) 2BHK flat. The asking price is around 50 Lakhs and the possession is in couple of months time. Since I am a first time buyer and buying the house for my own use, I have some concerns:

    1. Porwal road, used for accessing the building isn't in good shape. Every builder along the road talks about development of the road in near future, and also about proposed DP road and ring road. How realistic are the infrastructure developments in the area in next 2-3 years?

    2. The builder has an NOC from Airforce authorities for 37 meters of height. However, the 11 floors with the ground floor parking looks to exceed the said limit (37 meters, approx 121 feet) as the ground floor's height is clearly close to 20 feet. Is there a chance the building loosing a floor or two for any violation of norms? I more so concerned as I have shortlisted the top floor.

    3. I am not from Pune, and may leave Pune in near future (may very well settle down in Pune as well). If I do leave Pune for good down the years, can I expect an appreciation in the property in the locality in 5-6 years' time?

    Will really appreciate if someone can guide me.


  12. how do we know after paying huge sum if we have bought flat or any trap property act say weleased !!

  13. Dear Ravi Sir, I am a big fan of yours I really follow your blog which help me in understanding the current real estate market. Today I need your help as I am planning to buy my first home and I am planning to buy it in Hinjewadi in Hashtag project by Legacy life spaces and Sidhivinayak Group. Could you please help me in understanding if the location and builder which I choose is fine as I have just done a basic research via there websites. Please let me know your valuable feedback for this projec Should I go ahead?