Is This A right time to buy property in Pune –Part Two

A famous quote in the property market :
“Property at any cost is cheap! And when it is in a growing market, it is damn cheap!!”
The statement itself shows the myth and the reality as perceived by some bearish enthusiasts.
I am thankful to all who has read this post . The overwhelming response to the post is a clear indication that all probable buyers are having very serious approach towards the issue.
In fact all 47 comments on my post on Indian real estate Forum have forced me to write the part two of this article.
Few people Like Rajesh were in bit of hurry to publish the analysis of the poll. There were positive comments negative comments, few were balanced one. I really once again say thanks to everybody and putting my view with further clarity.
I t is a universal truth that home in one of three basic necessities of a human being. Appreciation/depreciation are the side effects of the bought property but property is basically bought because of the need . It is as good as buying clothes or food. Whether one is going to buy a branded shirt or not depends on individual but he needs to buy a shirt is universal truth. Same is true with the food.
One more universal truth is the segment of 15 Lacs to 25 Lacs is a typical middle class segment. For him buying a property is a basic need OR sometimes up gradation from 1RK to 1 BHK or from 1 BHK to 2BHK.
I personally has seen /experienced around three slowdowns in my professional tenure of 22 years, and I agree to disagree with entire people who are bearish or advising people to not to buy property this time; by showing fears of slowdown in Pune real estate sector. Therefore I want to put forward my views on the current scenario.
• Pune is growing and will continue to grow. (Please refer to the Mackinsey’s report which speaks about 35% growth for the city every year)
• One cannot stop the growth rate of Pune. It may be a bit slow growth than expected because of infrastructure. I mean lack of infrastructure and the bourgeois attitude of the nincompoop leadership towards the growth of the city.
• Land for development is going to remain the same, but population is going to grow and chiefly because of migrants in Pune for Job, both from and outside Maharshtra.
• Current job market of Pune is very hot. So many new companies are investing in Pune. Tilt is more towards PCMC, Moshi, Bhosri and Chakan. Apart from the regular areas ,otherwise.
• Ranjangaon MIDC is also attracting many companies.
• Ambegaon is growing with leaps and bounds. In fact Ambegaon is at the centre of two very big education Empires. Bharti Vidyapeeth and Sinhgad Institute. Proximity to bypass highways is adding more value and becoming a favorite spot to Punekars and western Maharashtra people.
• This new Jobs is going to create a huge demand in the segment of 15 Lacs To 25 Lacs.
• Once again because of the demand supply ratio in this particular segment; rates are going to go high. This is irrespective of leadership or the lack of it.
• If you do not buy now, because of the rate hike one has to compromise on a shrinked house or need to look further away in terms of distance.
• If we take the projections of next ten years (particularly above mentioned price band) , we are definitely heading towards a “Kholi” concept or one RK property.
• Development plan of Pune is becoming a mystery, and nobody can give the answer. There are many wasted interests of politicians which in fact are not allowing it to happen may be for their own interests in the city.
• Getting sanctions to high-rise buildings even up to 70 meters (now it is possible at PCMC and Pradhikaran), because of high construction cost; middle class/ common man just can’t think about it.
• People talk about big corrections even up to 30 to 35 %. My comment is, “not possible”. Lets us answer to following questions to ourselves.. “Cement rates are going to fall down?”, “Steal rates are going to fall down?” , “ Labor rates are going to fall down?”, “Construction material rates are going to fall down?”,” Diesel will be available at Rs 25 to30/liter?”, “Basic land prices are going to fall down?”
• If any one of all explored questions is forcing us to give the answer “yes” then all property consultants /advisors; who are absolutely bearish are correct.
To support my points I will add one more example.
In 1990 one was able to build a bungalow in Pune if he was having Rs 25 Lacs
In 2000 One was able to buy 3 or 4 BHK Luxurious flat or penthouse, if he was having around 20 to 25 Lacs.
In 2003 one was able to buy 3 or 4 BHK luxurious flat in the same budget.
In 2009 even after the slowdown one can buy only 2BHK in same budget.
This happens because of IT growth. IT growth started showing upward trend since 1996. It hits to its First slowdown in 2001 and second slowdown in 2007/8.
My sincere request to you is to analyze all given facts on a sheet of a paper and then conclude.
All formulaPCMC,RANJANGAON MIDC,CHAKAN INVESTMENT IN REAL ESTATE of rent*200 are for the people who are already enjoying their first house and now thinking of second. This formula does not include all those mental stress in finding new house, shifting your luggage, stress of finding new broker and his brokerage, stress of finding electrician and plumber for all those small small works, which finally bring your daily routine to a standstill.
All bank FD and ROI in terms of bank interest become useless when you do not own a house; because one simply cannot reside on/in /at FD certificates. I mean to say; Fixed Deposit certificates cannot become your residential address.
As far as question of buying in slowdown; it is another mystery. The fear of further slip in the market won’t allow anybody to buy the property at that time. Nobody is really able to define the bottom of the market slow down.
In fact I would go further ahead and say this may be your last chance to buy a flat between 1 bhk to 2 BHK in this price band. Otherwise you will be having the same butter fingers as our Indian cricket team. They drop catches and loose matches that really does not differ much to them; but what about you…!!!!!
I once again want to repeat my statement; sitting on the bank of river and giving advice is very easy .
Wake up buyers. This may be the last call of buying 2BHK in this price segment. If you don’t become aware now, the ignorance might cost you dearly in the future and the days to come. Bears, Are you listening?