Interest Payment

Here is an email from friend of mine. I thought I can put up in blog here so everyone knows and can help in dealing with Parkstreet for him. I took out his ame and apartment number, etc.

---------------------
I am XXXX,this is regarding my flat ABC-102 in Park
street.I have booked the flat as part of this group and registered
on DD-MM-YY.Now Park street is demanding me nearly 1 lakh rupees as
late fee(Interest charges) . They are calculating the interest charges by showing wrong status of
the flat.

I received a demand letter from Park street in July 2009 for 92%
amount.According to them 92% construction was completed at that
time.But 5th floor was in construction at that time where as my flat
is in 8th floor.

I did not understand, how 92% completed when 8 th floor was not at all
there.

I sent the demand letter to banker(LIC) and asked them to dispatch the
money.
After 15 days LIC has released only 40% money and said as per their
validation the flat was not completed 92% and
they can not release 92% money as park street mentioned in their
demand letter.

After that, Park street released 2 more demand letters and LIC
released the amount as per their validation.

Recently I received 4 th demand letter from Park street for remaing
balance and added nearly 1 lakh as an interest charges(calculated from
July to till date for the balance amount).

One interesting thing here is,Still the construction status is at 92%
even after 8 months.......but calculating interest charges from July..

I called finance dept of park street but they are not responding
properly...

Can any one help me how to resolve this issue.
--------------------


Did you every received any letters like these? what have you done?
I think it is not fair on ParkStreet side to expect such money that too after such long period. Any suggestion will be useful.

Pune Real Estate Price Dynamics

So, Continuing with my previous blogs on pune real estate, I though I will update you guys about this weekend's update.

This week, we met many builders and more than that many buyers. Several people contacted me from different places in India but also from outside India :)

So, I thought it would be only more helpful if I were to share more of my weekend home search information with you all.

First, I saw that there are fewer 1BHK flats available but there are very few takers. Reasons:

• They are out of people for most lower middle class people (15 Lacs +)
• Most people prefer to have childrens. So, all of IT crowd is looking for 2+BHK (even though they switch jobs a lot and change cities all the time)
• 1BHK flat may be a below status (?)

So, I saw the availability of 2BHK. Inspite of all the rates increase, one of the reasons rates have not come down to what it should be (50% cut) is because of 2BHK. During the boom time, several builders planned apartments that are lot more of 3BHK and lot less of 2BHK. Some time ration was 4:2 on each floor.

With boom in IT, people did buy lot of 3BHK at that time. Now, with down turn, uncertainity and liquidity problem, those 3BHK buyers have moved a step down and are buying 2BHK. That has created competition to purchase low inventory of 2BHK between existing 2BHK buyers (cash constrained) and new 2BHK buyers (with excess cash and ability to buy 3BHK). So, most of the places 2BHK are being sold. This provides enough cash for builders to keep hopes high that they will have pick in the market and will also seel 3BHK.

With time, I think they will build lot more of 2BHK and few of 3BHK. So, either lot of 2BHK or lot of 3BHK with less sq ft. This might create more concentration of 2BHK. What do you guys think?

P.S.: Are your friends purchasing or planning to purchase flats in pune? If yes, please ask them to share their latest negotiated price with me (us). We are trying to create initial inventory of all locations and lowest price negotiated. This will allow all of us to negotiate and bring the rate down further. Also, it will allow to compare all properties in one place. Wait for more update on this ;-)

And if you are planning to buy, ask me (wakad side) and you will get information of what is latest.

am a software engineer by heart and profession. Not an expert on real estate. But hey, we can always collaborate and share information.

IT Downturn In India and Home Prices

Well, we all know that IT people got all this housing property prices to go sky high. Now, there may be good news with all the IT downturn.

Check this link about how big developers are canceling their SEZ approved plans. What does it mean that there is less demand now and all IT companies are expecting less growth in future too. This means less rich IT employees to buy residential.

I think it is a good news for everyone. Those who are in IT and not able to afford and those who are not in IT.



And for those of you who think home prices never goes down, here is the home price trend in Florida from www.zillow.com showing median home prices in Florida. 2009 Prices are below 2005 :)

How is your company doing? Are you purchasing home in Pune? DLF and Unitech decreased their rate this year by 40%. I know they are not in Pune but Pune has grown mostly due to IT. Are you getting similar price cut from your builder? If not, are you still purchasing?

Pune Real Estate

It's been quite long since blogging but today I am trying to reach out and see how many of you are in Pune or outside Pune but looking at purchasing the apartments here from the builder.

I have been looking for the dream home to be purchased but the kind of price quoted by builder is amazing. It is easier to buy similar home in USA in places like Boca Raton, Florida than in Pune Wakad :)

So, we found similar minded few people and created 10-15 group who can together bargain with developers. we went to places like ParkStreet, Rajeev Palace and few other places. We also got in touch with few investors to see if they are interested in getting rid of some of their assets to increase cash in their hands. Ironically, many of the investors are ready to sell the same flats that builders are selling at lower price.

Builders have no buyers and or very few buyers. There is lot of interest but very few sales. Everyone is hanging in there in hope of turn around. And to add to that, there is lot of confusion.

We sent different people at same locations and found that every sales buy provided us different rates for same flats, told us different availability numbers and when you merge all together, you figure it out that they have lot of flats available and rate is variable as much as 700 rupees /sq ft in quotation inself.

Park street, which has sold flats in recent past to rates lower than 2500 Rs/sq ft will quote you 2900 to 3200 depends on which day you go there :)

Gk Builder is quoting 2300 Rs/sql ft and will mostly sell at under 2000 Rs/sq ft if you buy from places where nothing is built yet but trust them. In this economy, not sure anyone would like that :)

What you guys are doing? In for purchase but only at lower cost? Leave a comment... and I will contact back. We are expecting 2000-2100 is a good price for places like Parkstreet. what do you guys think?

And how legal is Pune Builder's Association Cartel system? Not much if there is no political support for them.. but let's leave that aside for now.

Update: My dear friends, thanks for your encouraging comments and your wish to join the group if we are able to get the rate down. But I have no idea how to contact you unless you leave some information. Few of them left Mobile # which is good too.. but otherwise.. not sure.
You can contact me at "srinivas dot rc at gmail dot com"


Update (12/Oct/2012): It is almost 3 years since then. I would like to inform that we did buy few flats ... almost eleven at Parkstreet at that time and at the rate of 2600. We could have bought at 2500 or less if people had more interest and were not chickening out :) Ultimately, builder is professional and people who unite for small window of opportunity didn't stick. But again, we had lot of people in our group .. almost 20+ and lot of other people in the group we didn't know about. It was great experience and even though I was doing it for few of my friends ended up buying and now updating this blog from my very own house.