Gudi Padwa: The Festival of Renewal and Property Investment

Anil-Pharande

 

 

Anil Pharande, CMD – Pharande Spaces

India is a country of myriad traditions and festivals that are not only times of celebration but in many cases also major investment decisions. As a result, many market segments are also aligned to these periods. The Gudi Padwa festive season is among the periods of intense real estate market activity, because this period is traditionally seen as one of renewal and forward planning.

Gudi Padwa is a celebration of the coming of spring, during which nature once again delivers its gift of abundance after the largely barren winter months. In fact, this period is celebrated by almost every culture in the world in some form or the other. But probably nowhere with as much joy and fervour as in India, which is a country with very strong agrarian roots. It is no accident that Gudi Padwa coincides with many festivals all over India, from Baisakhi in Punjab, Puthandu in Tamil Nadu, Yugadi in Andhra Pradesh and Vishu in Kerala.

The cross-linkage of Gudi Padwa with real estate purchase is by no means a latter-day phenomenon – this trend has been in evidence since historical times. India is a country where certain times of the year as seen as very auspicious for any activity related to investment and wealth creation. A self-owned home is the biggest and most important investment for most Indian families, and the Gudi Padwa festive period invariably sees significantly increased property purchase activity.

This year, Gudi Padwa coincides with many other favourable market dynamics. Very much in keeping with the spirit of spring which Gudi Padwa celebrates, India has emerged from a prolonged period of political uncertainty and economic doldrums. A strong and resolute government has taken charge, and the Indian economy is visibly reviving. Across the country, Indians have put job insecurity and indecisiveness about their future goals behind them. However, the property market has not yet picked up concurrent pace, resulting in a very favourable scenario for home seekers this Gudi Padwa.

Depending on how the property market is behaving, developers roll out various offers and incentives to encourage buyers during the Gudi Padwa season. This year, such offers are going to be plentiful, but a more important dynamic we will see is that many developers who had refrained from lowering their rates may do so selectively this year under the guise of festival discounts. Without a doubt, the tradition-fuelled upswing in buyer sentiments must be harnessed during Gudi Padwa.

More than ever, home seekers intent on making their purchase this Gudi Padwa need to be guided by the right fundamentals. It is important to understand that when it comes to freebies and offers, the real estate market is no different from any other kind of market – an attractive offer only makes sense if it is attached to the right product. Considering the magnitude of investment one makes into a home – and also the purpose of this investment – it is very important to ensure that one is buying what one really wants and needs.

One of the best ways to maintain a clear focus while buying a home in a festive season is to make a list of the merits and demerits of every option one has short-listed first. Given the specific nature of home purchase, sufficient weightage must be given to location, the reputation of the developer, the facilities and amenities available, and of course overall value for money. If all these check out positively and are backed by an attractive offer or discount, one is on the way to making a good choice.

About The Author:

Anil Pharande is Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in Western Pune. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer in the PCMC area offering a diverse range of real estate products catering especially to the 42 sectors of Pradhikaran.

The Value Proposition Of Large Vs. Small Flats In Pune

Anil-Pharande

 

 

Anil Pharande

Over the last couple of years, I have been observing with concern the decreasing size of flats on the Pune real estate market. Of course, it is the demand for smaller flats that is driving this kind of supply.

With housing prices in the Pune Municipal Corporation rising relentlessly, the ‘biggest’ opportunity that developers perceive is in smaller flats that get sold in the shortest possible time. This kind of supply is aimed at first-time home buyers who either have limited budgets or low financial confidence.

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Smaller Flats – Pricing Trap

Though these are supposed to be ‘affordable homes’, the pricing of these units is actually on the higher side. They sell because the prices are still lower than those of larger flats, but the buyers are actually paying an excessive unit cost.

The reason for this disparity is that the ‘pigeon holes’ housing model itself has some inherent flaws built into it. To begin with, the share of common area that needs to allocated in a project that consists of only of small-sized homes means that the project loses in terms of overall efficiency and sale-able area. This results in lower revenue potential, so developers bump up their prices to compensate.

Secondly, the cost of construction depends on the quantity of raw materials being used. When a developer is building a project which comprises exclusively of small units, his development costs actually go up because every unit needs to be provided with separate fittings, appliances and finishes.

As a result, he will increase his prices to make up for the loss in profitability.

Home buyers should be aware that the converse is equally true. In a project with larger units, developers save on costs because of more efficient common space utilization and lower consumption of fittings, appliances and finishes for individual units.

Better Common Amenities

This is why a 1 BHK is often only 30-35% less expensive than a 2 BHK. The bottom line is that by opting for larger flats, property buyers are getting more value for their money.

Also, projects comprising of larger flats tend to have better common amenities, which the developer can maximize the overall livability and therefore attractiveness of the project rather than needing to focus on making as many units as possible within the available space.

The obvious question that follows is – where can middle class home buyers from Pune find larger flats that fall within their budgets? The answer is – in the developing (rather than expensive over-developed) parts of the city.

For example, West Pune is a corridor where hundreds of property buyers are still able to find true value for their money.

Property rates in many of the the areas of PCMC are lower than the inner localitions of the Pune Municipal Corporation, which means that buyers can get the benefits of larger flats with better amenities there.

With the vastly improved road connectivity, the newer areas of West Pune close to Hinjewadi and the MIDC are now becoming the destinations most favoured by home buyers working in these employment catchments.

About The Author:

Anil Pharande Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in Western Pune. Pharande Promoters & Builders, the flagship company of Pharande Spaces, an ISO 9001-2000 certified company, is a pioneer in the PCMC area offering a mixed bag of products catering especially to the 42 sectors of Pradhikaran. Puneville in West Pune’s Punawale is the latest integrated township project by Pharande Spaces

 

Finolex Industries Selling Pune Land To Raise 4 Billion Rupees

Finolex Industries Ltd., India’s biggest maker of pipes made of polyvinyl chloride, surged to its highest in almost three years after the company said it expects to raise about 4 billion rupees ($86 million) selling land.

The company revived its plan to sell 78 acres (31 hectares) of industrial land after an increase in real estate prices, said P. Subramaniam, chief financial officer, said in an interview. Finolex had in 2008 proposed selling the property, he said.

The land sale will help Finolex improve its cash flow, said Tejas Doshi, vice president of equity research at Sushil Financial Services Pvt. The company, which reported a 67 percent drop in profit in the three months through June, also plans to spend 800 million rupees to build a new factory, Subramaniam said by phone today.

The land sale will help “improve the balance sheet,” Mumbai-based Doshi said. “It will also help their expansion plans.”

Finolex will raise 500 million rupees by selling non- convertible bonds to build the plant and will fund the balance from its profit, Subramaniam said. The company hasn’t “finalized” the land sale yet, he said.

Source

Pune Property Tax Rates May Rise With New System

Based on the directions of the state government, the Pune Municipal Corporation (PMC) has decided to introduce the capital value system (CVS) for computing the Annual Rateable Value of a property, for fixing the property taxes in the city. The civic administration has tabled a proposal before the standing committee regarding the move.

The move has been designed to bring uniformity in the taxation system in all the municipal corporations across the state. As a result, if the proposal is cleared, the property tax charges might go up.

At present, the ARV is fixed on the standard rents fixed by the Rent Control Act. Under the ARV system, the probable gross rent of a property is taken into account. For domestic buildings, 20 percent of the amount is calculated. For commercial buildings 25 percent of the amount is calculated.

Under the new CVS, the calculation of tax is based on the value of the land as well as that of the building. It takes into account the capital value of the building, which is in turn based on the cost of the land as well as the cost of the building, net of depreciation.

The proposal says: “In different municipal corporations in the state, there are different methods of fixing the ARV of a particular property. But, in order to bring uniformity, transparency and introduce simplicity, the new method of CVS is being considered.” The ARV fixed under the capital value system, will be updated every five years.

Source

http://www.indianexpress.com/news/New-system-on-anvil-to-evaluate-property-tax-likely-to-push-up-rates/677588

Free Parking Space Norm In Pimpri-Chinchwad Municipal Corporation

Pimpri-Chinchwad Municipal Corporation is the first civic body in the state to come up with a decision under which buyers of residential apartments get free parking space.

On June 11, 2009, the Pimpri-Chinchwad Municipal Corporation (PCMC) declared that no building permission plans will be sanctioned if the builders refuse to provide free parking space to apartment buyers across the twin industrial township.

This was after a series of reports in Pune Newsline, highlighting the Bombay High Court which had ruled that builders cannot sell parking space and that it should be made available to the flat buyers free of cost.

Pune Property Tax: PMC Says One-Time Tax Not Feasible

PUNE: Shooting down the Congress party’s proposal to amend the property tax rules to introduce a one-time (optional) tax payment scheme, the Pune Municipal Corporation (PMC) administration has stated that the proposal is unfeasible and will result in decline of the civic income from property tax collection.

“If at all the one-time tax plan is executed, the PMC cannot make it compulsory. Also, the civic body will face financial losses as if property owners pay tax for one-time as the PMC will not be able re-assess the property. Small properties could pay one-time tax, but big properties like malls, IT properties, banks, hospitals, hotels, etc will not show interest in the scheme considering the amount they will have to pay,” said municipal commissioner in his comments submitted to all party leader’s meeting.

The administration has stated that the proposal is not feasible as it will deprive the PMC from re-assessing the property and considering the rising property rates in the city, it will result in the financial loss to the civic body.

Read the rest of the article here.

PMC To Impose Penalty On Property Tax Defaulters

PUNE: The Pune Municipal Corporation (PMC) will execute the state government’s notification to impose a 2 per cent penalty on property tax defaulters.

For the year 2010-11 property tax for the first six months has to be paid before September 30, 2010 and those who fail to pay it will have to pay a 2 per cent penalty on the tax amount every month till the tax is paid. The second instalment of the property tax has to be paid before December 31, 2010.

The PMC’s tax collection and assessment department has proposed that digital pictures of all properties be taken for the department’s records and an aluminium plate be fixed on each property, identifying its survey number and other details.

Read the rest of the article here.

Celestial City: Ravet’s Pride Is Right On Schedule

Celestial City, the unique 25-acre integrated township by Pharande Spaces and Rama Group, is now in the second phase of construction. As planned, this premium apartments complex at Ravet, PCMC is transforming the real estate topography of an area known as the Gateway to Pune.

celestial-city-ravet-roads1

Celestial City has been conceived as a completely self-sufficient residential microcosm that will offer its residents absolutely everything by way of a comfortable lifestyle.  That blueprint is now rapidly being transformed into reality as construction enters the next phase.

The location of Celestial City couldn’t be better – it was planned as both the ultimate residential destination and a sure-fire investment hotspot. Ravet is located at the confluence of the old NH4, the Dehu Road- Katraj bypass and the Mumbai-Pune Expressway.

celestial-city-phase-two

Its ready accessibility, as well as proximity to vital establishments, has earned it the distinction of being one of the most prominent growth corridors on the Pune real estate market.

Because of its unique location, invigoratingly green spaces and affordable residential property options, Celestial City is now attracting a huge demand from executives working in Hinjewadi, Pimpri-Chinchwad, the Talegaon MIDC and Chakan MIDC.

With Phase II of Celestial City now in active progress, the project is well on the way to completing the planned roster of 2000+ units at this avant-garde budget homes project.

celestial-city-sample-flat

Celestial City is backed by the experience and impeccable track record of two leading development concerns. Pharande Spaces, the residential property trendsetters in Pimpri-Chinchwad, already have several landmark projects to their credit – including the award winning Culture Crest.

To date, Pharande Spaces have completed residential projects in excess of 1.5 million square feet. Likewise, Rama Group’s professionalism and expertise have led to the completion of 23 projects that cumulatively account for 5 million square feet of construction.

The fact that Celestial City is fully underwritten by the country’s leading financial institutions ensured a smooth, seamless construction flow even during the worst of the recent recession. With Phase II on schedule, Ravet’s crowing glory has taken a decisive step towards final completion.

When two real estate giants join hands to create the City of the Future, the outcome can be nothing less than magical….

celestial-city-archA masterpiece in the making

celestial-city-sample-flat-livingroom

K. D. Nagarkar is a blogger and freelance journalist who specializes in real estate and environmental issues. He keenly follows the development of integrated township properties and other sustainable projects in and around Maharashtra.

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

Pune Mayor: Go Green, Get Tax Rebate

Mayor Mohansingh Rajpal has said that builders should play a more pro-active role in developing facilities for recycling of water, rainwater harvesting, sewage treatment as this will help reduce the load on Pune Municipal Corporation.

“In return, the PMC offers a 10% reduction in property tax that will make a project more attractive to buyers,” he said, while inaugurating the property exhibition series of CREDAI, Pune, VITS Hotel, Balewadi.

The mayor said, “The young generation of builders is doing a lot of good work for the city. Pune needs more and more young people in the process of development of the city,” he said.

The mayor asked CREDAI members to explore ways in which tourism can be increased in the city and assist the PMC to develop projects such as cleaning up the river, development of a world class exhibition centre, museums and malls.

The CREDAI, Pune, exhibition is from August 6 to 8. Projects on display cater to 1BHK to 5BHK flats, bungalow plots, pent houses, farmhouse plots covering all areas in PMC and PCMC.

Read the rest of this article here.

Pune Builders Want Extra FSI For Redevelopment Schemes

A rage in Mumbai with the Bombay Municipal Corporation giving additional FSI to builders, Pune is still going slow with such schemes.

The Confederation of Real Estate Developers Association of India (CREDAI), Pune, head, Satish Magar said, with no incentives being offered to the builders as in Mumbai, developers are not too keen on taking up such projects. “In Pune there are several such buildings which needs redevelopment. However, with no incentives, the builders have to settle with very less profit and generally steer clear of such projects,” he said.

A senior town planner said that Bombay Municipal Corporation (BMC) was proactive and made the amendments as land was becoming scarce and got the extra FSI to go higher which made them take up several dilapidated projects. “The BMC made the necessary changes in the development control rules and it is being implemented,” he said.

While a senior member from the Mantralaya said that it is the duty of the civic body to make the necessary amendments. “ If Bombay Municipal Corporation can do it, so can Pune. Once the amendments are made and the necessary proposal is passed by the GB, then Pune too can have a plan ready for redevelopment especially for the old dilapidated structures,”he said. A civic body member said that presently there are no sops for developers.

Read the rest of this article here.