Pune Real Estate: What To Expect In 2010

Pune’s real estate market is pulling itself out of the doldrums of the slowdown. Over the last three months, buyers have begun populating the residential market again and are beating a path to various developers’ sites in search of good deals.

While Pune’s real estate market was in the deepest throes of the downturn, the 1BHK and studio apartments were practically the only moving products. Today, general buyers preferences have once again evolved to 2-3BHK flats. The most popular price tags currently fall within the range of Rs. 25 to 65 lakh.

The slowdown had brought about residential space affordability and availability in areas that were previously out of reach for middle-income buyers. Due to reduction in pricing, residential property buyers because of a choice of attractive deals in preferred areas like Baner, Wakad, Kondhwa, NIBM Road and Aundh.

There was – and continues to be – considerable demand for projects along the now vital Nagar Road, which now represents a new IT/ITES growth zone. Investors are looking at properties on Nagar Road because of its high future appreciation potential.

Projects that were put on indefinite hold during the financial crunch are now seeing the light of day, with construction once again on evident across the city. Projects that are due to be launched within a six-month time frame are being advertised heavily.

On the downside, we have been seeing the first stirrings of price escalations in Pune. Based on the fact that the demand revival is still in its infancy, this represents a worrisome scenario which seems to indicate that the slowdown did not deliver a sufficiently convincing message. Owing to the price-conscious buyer profile that generally defines Pune, demand for residential spaces will only continue to grow as long as rates remain rational.

I have confidence in Pune’s real estate market in the mid-to-long term. In a few years, Pune will necessarily have addressed some of the more pressing problems its is facing today. I expect that our town planning authorities will have woken up to the fact that urban planning and development must factor in the city as a whole, rather than in terms of segments.

However, before this happens, increased FSI in some locations and not in others will result in high-rise buildings in these pockets – along with all the implied infrastructure challenges – while slum issues will finally have to be addressed in others. These issues should ideally lead to major amendments at the blueprint stage, and also massive redevelopment of certain areas.

Of course, it will take a long time to tackle all problems such as inadequately maintained roads, insufficient drainage and severe shortfalls in terms of water and sewerage networks. However, it is certain that there will, in the long term, be less lopsided real estate growth, and that the city will have a more uniform growth pattern.

I expect that the PCMC area will risen to prominence over the next five years, owing largely to the planned nature of its development pattern. Currently, the highest degree of Pune’s urban sprawl is along the national highway, with the density of land development declining with distance from the highway.

Eventually, Pune’s urban sprawl will have been regularized, with at least some of the infrastructure necessary to develop and sustain new areas put in place.

Avinash Gokhale is Director – Marketing & Corporate Planning, Pharande Spaces – a leading construction and development firm operating in the PCMC area of Pune, India.

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Maharashtra CIC Orders Early Return Of Property Papers

Residents of Maharashtra who registered their properties before 2002 and have been struggling ever since to get the original papers can now look forward to some relief.

In a decision that is likely to benefit lakhs of householders in the state, state chief information commissioner Suresh Joshi has directed the additional chief secretary (revenue and rehabilitation) and the inspector general of registrations to publish details of all registration documents with current status and invite people to take their original papers, duly registered, back.

Read the rest of the article here.

Maharastra Govt Allows Construction Of Taller Buildings In Pimpri

The state government has permitted construction of buildings upto 70 metres of height in Pimpri-Chinchwad Municipal Corporation’s (PCMC) jurisdiction. Presently, only 36 metres tall buildings were allowed in the civic body’s jurisdiction.

The civic body had sent a proposal to the government, seeking permission to allow construction of 70 metres tall buildings in its area. The government has now sent a circular to the municipal corporation, sanctioning the proposal.

Read the rest of the article here.

PCMC Cracks Whip On Erring Vendors Using Calcium Carbide In Mangoes

Following complaints of the use of calcium carbide to ripen mangoes, the health department of the Pimpri-Chinchwad Municipal Corporation collected samples of different varieties of the fruit from vendors.

Officials said calcium carbide contains traces of arsenic and phosphorous which are harmful for humans. When dissolved in water, calcium carbide produces acetylene gas affecting the neurological system.

The harmful effects of calcium carbide consumption include headaches, dizziness, mental illness and other problems. “Sometimes even dye and colouring agents are used to give bright colours to the fruit,” officials said.

Read the rest of the article here.

 

Indian Government Drafts New Law To Guarantee Land Titles

To bring uniformity across the country and replace the existing deeds system fraught with litigation due to inaccuracies in property records, the Rural Development Ministry has drafted a model law to usher in a system of conclusive property titles with title guarantees through registration of immovable properties.

The Department of Land Resources under the Ministry has drafted The Land Titling Bill, 2010, that provides for establishment and management of a system of conclusive property titles with title guarantees and indemnification against losses due to inaccuracies in property titles, through registration of immovable properties.

Read the rest of this article in the Indian Express, Govt drafts a new law to guarantee land titles.

PCMC Hospital To Get MRI Scanner

Pimpri Chinchwad Municipal Corporation’s Yashwantrao Chavan Hospital will soon get a MRI scanner as a part of a public private partnership according to senior medical officer Dr Nandkumar Kunchagi.

With doctors advising for MRI scans for orthopaedic and neurological disorders, patients end up spending  more than Rs 5000 for scans at private hospitals. The PCMC has spent Rs 3 Crores to buy the MRI scanner and now scans will come cheaper for patients. The task of operating the scanner will be given to a private firm and tenders have been invited for the same.

Read the rest of the article in the Sakaal Times.

Amitabh Bachchan Endorses Pune’s Satellite Cities

Amitabh Bachchan will be visiting Pune and more so, seems to be endorsing the city already. He is on his way to the city and goes down the memory lane and cherishes some memorable moments of his life associated with it like National Defence Academy and Maharashtra Literary Sammelan.

“Pune, the city once with the maximum bicycles in the country, is now overtaken by mobiles and cars and huge real estate. No longer quiet heaven. But mini satellite cities are evolving around Pune, aesthetic, modern and self-sufficient. A boon for Mumbaites that wish to migrate.”

Read the rest of the article, Amitabh Bachchan Endorses Pune’s Satellite Cities.

PCMC Clamps Down On Illegal Hoardings

The Pimpri-Chinchwad Municipal Corporation (PCMC) has bestowed powers on its four ward offices to take action against illegal hoardings within its civic limits. Municipal commissioner Ashish Sharma handed over an official letter to officials in this regard. The civic administration has also directed the assistant commissioner of licence and signage department to prepare a monthly report of the action taken and fine collection, and submit it to the commissioner for the review.

Read the rest of the TOI article, 4 PCMC officials to clamp down on illegal hoardings.

PCMC Fines Builder Rs 50 Lakh For Construction Without Permission

Here’s a prime example of how seriously PCMC takes strict adherence to its carefully laid-out development norms:

The Pimpri-Chinchwad Municipal Corporation (PCMC) has decided to impose a fine of Rs 50 lakh on Vikrant Developers that constructed four extra floors without permission at its Pimple Nilakh project. The project ran into controversy last week after allegations surfaced that it was constructed by changing the course of a nullah and pushing a floodline inside.

Read the rest of the article in the Indian Express, Construction without permission: Builder to cough up Rs 50 lakh fine.

Real Estate Investment Tips: Not A Game Of Blind Man’s Bluff

Successful real estate investments are about a lot more than buying cheap property and selling it at a profit. Plunging headlong into property investment without a proper understanding of what you hope to achieve is not a good idea.

This is not to say that real estate investment is always a chancy proposition. Backed with the right information, you can definitely succeed. Here is a general blueprint for successful investment.

To begin with, be aware of the odds. There are chances of a loss if you don’t have an accurate idea of the state of the property market – and the changing values of your investment. Before you make a serious property investment, ensure that you have adequate insurance coverage.

Some successful property investors bulwark their investments by forming a nominal limited liability company for this, and you may wish to consider this option. Consult a knowledgeable lawyer who is savvy about the legal aspects of your local property market.

Kinds Of Property Investors

Property buyers fall into two broad categories, and we’ll discuss both of them briefly:

1. Actual Users

Such individuals seek to make a percentage of profit on properties that they are themselves currently occupying. This may take the form of partial rental or sale of a residence or the sharing of office or factory space with another business entity. It only makes sense if the part of the property being rented out or sold would otherwise remain idle and non-productive.

A more rewarding option is the outright sale of the property. This is often done for reasons other than investment – the seller may be seeking larger or more luxurious premises, in the process of career-based relocation, or unsatisfied with the property for other reasons. There may also be a need to downgrade on certain expenses such as maintenance costs. Since the sale of such a property is usually need-based, the options are reduced drastically.

The kind of profit one can make on the sale of a property in current use depends on the age and state of the property, its location and its inherent value on the market. A residence purchased five or ten years ago will have appreciated in value for the simple reason that property rates are constantly increasing.

The value of the property will be even higher if the location is one in current demand. Of course, the price a second-sale property will fetch will also depend on whether or not it is well maintained, the facilities it offers, the area it is located in, etc.

2. Exclusive Real Estate Investors

Such investors buy property for the exclusive purpose of making a profit from it, and do not utilize the estate personally. Residential property investment is usually in flats, bungalows, row houses, duplexes and township properties, while commercial property investments are focused on shops, offices, factory sheds, etc.

In the current scenario, commercial property investments are less lucrative than residential property investment, because the absorption rate for residential property is much higher. Property investments are also done in non-developed or partially developed land.

Pure investors have a better chance of making a profit in their dealings simply because their options are wider. There is also no immediacy or urgency involved, since the basic objective is timing the market for optimum profitability. Professional investors of this kind should keep certain guidelines in mind:

* Location is everything. Even if rates are steeper in a preferred area, go for it. It will pay rich dividends in the final analysis

* Choose to invest in properties under reputable banners. The very name of a famous builder makes a decided difference on the bottom line of the sales deed.

* It is always more profitable to invest in properties under construction or still in the planning stage. Here, the investor has a say in the kind of property he or she wants. Till the date of actual completion, rates will tend to be on the higher side

* Properties available for ready possession – though instantly available – do not allow for much picking and choosing on the above-mentioned points. However, since certain dynamics of the property market remain constant, a profit is still possible. A ‘readymade’ property bought for the purpose of investment will have to be given sufficient time to appreciate in value. Also, certain modifications specific to a potential customer’s needs may have to be made. The cost that this involves would have to be adjusted in the final amount.

Property buyers are becoming increasingly specific about what they want. If one chooses to invest in residential real estate, the first preference should be towards units that are located on the first floor.

They should offer a good view and ventilation and, ideally, the use of a swimming pool, clubhouse and other trendy facilities. They should also be backed by adequate parking facilities. Township properties are your best bet on that score, since they provide all these and more.

In conclusion, real estate investment is not a game of blind man’s bluff. Nor is it ever a totally risk-free proposition, especially where spurious documentation, faulty judgment, market crashes and other unforeseen circumstances are concerned. There are some bases that need to be covered to reduce the risk factor:

* If you are utilizing a bank loan in to invest in property, make sure that the ratio of self-finance to the loan amount is supportive of a future profit
* Double-check all legal documents
* Investors need to do their homework and gain sufficient knowledge of current real estate trends.

Avinash Gokhale is Director – Marketing & Corporate Planning, Pharande Spaces – a leading construction and development firm operating in the PCMC area of Pune, India.

You may reprint or quote this article with full credit to the author and a link back to PunePropertyBlog.com