Guidelines To Buying A Budget Home In Pune

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The Pune real estate market is a highly price-sensitive one, and affordable housing is in perennial demand in this city. The bulk of the demand for affordable housing in Pune stems from the steady stream of manpower from other parts of the country, most of which belong to the working middle class.

While these home seekers invariably operate with a tight budget, they are still looking for decent homes that meet an acceptable threshold of lifestyle requirements.

While the premium and ultra-luxury housing categories continue to witness stability rather than any real growth, the affordable homes segment shows healthy demand and uptake.

However, not everything that is affordable shares this demand. Customers are primarily on the lookout for homes that fall within the city limits, are of decent sizes and have good amenities.

Of course, the price tag must be right – in the mid-income category, flats that fall within the price range of Rs. 35-50 lakh are the hottest sellers. Many developers who cater to this demand and are sensitized to the price-sensitiveness of their target clientele are offering all-inclusive packages that cover all the usual add-on costs to buying a home – VAT, stamp duty, registration fees, etc.

There is obviously a lot of investor demand as well – but again, this demand is squarely focused on the budget segment of homes in well-connected locations. For both end-user and investor demand, the target properties are 1 BHK and 2 BHK flats in localities like Manjri, Wagholi, Ambegaon, Bhugaon and Undri.

These have been identified as the growth corridors for Pune that are seeing development in all aspects – and, importantly, boasting of property prices that are still favorable for the middle class.

How To Choose An Affordable Home In Pune

Since the affordable homes segment is the primary hunting zone for predatory fly-by-night builders who specialize in cheating their customers, the first thing that a budget home buyer in Pune must verify is the reputation of the project’s developer.

Buyers in Pune need to do thorough research among the multitude of projects in the budget homes segment. By focusing on reputed builders, the search becomes faster and easier.

Apart from delivering on the promised project features, reputed builders will ensure that their projects meet the construction quality standard that are expected of them. The search gets further narrowed down and simplified if the buyer differentiates between meaningful and meaningless offers.

Meaningless offers include most freebies which several new builders tend to roll out in an attempt to hide or compensate for the flaws in their projects, in the location or in the documentation.

Meaningful offers are those that translate into actual, significant savings on the cost price of the property, result in increased value of the investment and provide convenient payment options.

Colori Phase 2 Undri

Budget Home Buying Guidelines:

Generally, it is advisable to:

  • Be somewhat flexible with your budget and not limit yourself to a set figure. The budget should be the second of third focus area – location and amenities ensure that the price you pay for a flat today will get multiplied several times in the near future.
  • Not be tempted by unrealistic promises from unknown developers working on the outskirts of the city. Many misinformed budget home buyers in Pune have fallen prey to illegally constructed projects in the past and lost out on their entire investment.
  • Deal only with well-known branded builders, especially if you are booking into an under-construction project. Such developers can be relied on to adhere to ethical business practices, and to deliver quality projects which will stand the test of time and yield good resale value in the future.
  • Not neglect the factor of appreciation potential. Pune is a rapidly-growing city and property prices will appreciate, but only in good locations and quality projects.
  • Negotiate with the builder on the price. Pune has always been a buyer’s market, and builders who see serious intent from a buyer will usually be somewhat flexible in their pricing. However, know where to draw the line on bargaining, so as not to lose out on a good opportunity.

Know What Amounts To A Good Location

The hallmarks of a good location for buying a budget home are safety, convenience and appreciation potential. All three variables derive from a single word – infrastructure. The development of roads, hospitals, shopping complexes, schools and avenues of entertainment all result in quality neighborhoods.

Appreciation and convenience are also a factor of accessibility from the city’s primary and secondary workplace areas, meaning areas where large numbers of people go to work daily. The more accessible a location is from such areas, the more attractive it is to buyers and investors and this drives up property price appreciation.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

What The Real Estate Regulatory Bill Will Do For Home Buyers

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Now that the Real Estate Regulatory Bill has been cleared for take-off and will be an enforceable law soon, the question that buyers are asking is how exactly they will benefit from it.

This is a fair question, considering that RERA (the Real Estate Regulatory Act) was primarily formulated for their protection and in their interests. Let me answer it as clearly as possible, without sacrificing on the necessary details.

One of the most important things that RERA will do for home buyers is to reduce their uncertainties when it comes to planning their finances around a home purchase. If we assume that a buyer has booked a flat admeasuring 1,000 square feet, and that the developers has promised possession in three years.

A flat of such dimensions (1000 square feet) in a location which is close to the city centre, or has good public transport connections to it, would potentially earn its owner anything between Rs. 1.5-2.5 lakh per annum.

If the developer keeps his promise and delivers the flat in the stipulated time, the buyer would be able to put the flat out on rent and draw an income from it to offset his home loan expense.

However, if the developer fails to deliver the property in three years and extends the delivery by a year or more without providing compensation for the delay, the buyer’s finances are thrown seriously out of whack. The Real Estate Regulatory Bill will safeguard property buyers from such eventualities.

In the latest amendment to RERA which was accepted in the final draft, real estate agents are also covered under its purview. Effectively, this means that property agents can no longer engage in deceptive promises, charge excessive brokerage or fail to perform their full duties in a property purchase. They will be held accountable for any deficient service or failure of omission or commission.

RERA will also ensure that home buyers will not be cheated on the promised layout, and that amenities and fittings will not change along the way. Notably, such unforeseen and unscheduled changes were a recurring nightmare and grievance for home buyers in the past.

real estate law

With RERA in force, the developer will not be able to make any changes in the layout, dimensions, amenities, facilities and fitting which were agreed upon at the time of signing the sale deed.

If they still occur, affected buyers can appeal to a tribunal which has been specifically instated to address such incidences, and be assured that punitive or corrective action will be taken against the developer.

Also, RERA will require developers to quote their asking rates on carpet area instead of super built-up area, which has so far been the norm. This aspect will take some time to be fully implemented, as it is a huge change which will require countless developers to recalibrate their rates.

There are many more facets to this Bill which will work in favour of property buyers, but the above clearly indicate that property buyers are soon going to stop being victims and will in fact be much more in full control of their property investments.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

How Rental Housing Benefits Our Cities

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Recently, the Indian Government announced its intention to deploy a modern tenancy law with the aim to promote rental housing in Indian cities, giving due heed to the requirements of contemporary tenants.

The planned National Urban Rental Housing Policy intends to address the needs of people migrating from rural areas to cities. It will benefit intending landlords who have so far shied away from renting out their properties, by means of fiscal incentives specifically designed to encourage rental housing.

If this policy becomes a reality, we will see a significant increase in investor demand for housing in areas where there is a huge requirement for rental housing. The result will be a far better availability of rental housing in cities where it is needed the most.

The Rental Housing Conundrum

India’s cities are continuously growing in terms of population, and increasing population has consequently led to more pressure on their housing markets. The rental property market is the only option for most people who have newly migrated into a city for employment, or are just at the outset of their careers.

Given the huge inward migration that Pune sees each year, the city’s rental housing market is literally a lifeline for countless individuals and families. As a result, rental housing is also a prime focus for real estate investors.

This is a trend we see in cities the world over, where the rental market thrives even when end-user housing sales are constrained due to macroeconomic factors.

If we look at the US market, even while home ownership was a common trend during the 1900’s, the share of the rental market was seen as increasing. Between 2004 and 2012, the rental market grew from 31% of 35%. In 2013, the total number of renters in the US was more than 43 million.

This trend also reflects in countries like India, where rental housing is always in demand – regardless of how the home sales market is performing. There are several factors driving this phenomenon, but one of the most pertinent facts is that rental housing has positive impacts to the overall economy and development of a city, as well as the country as a whole.

Developing cities have always attracted greater migration of talents from neighboring cities. This naturally puts pressure on the existing residential stock. Rental housing is the only bulwark against the growing cost of home ownership; it offers a greater flexibility and puts significantly lower financial strain on people.

Further, rental opportunities attract a vast cross-section of households and individuals from diverse age groups, ranging from students to high-ranking executives. Almost every Indian family with the budget to buy their own home has inhabited rental properties at some point.

A Range Of Housing Options

Rental properties come in a variety of configurations – the higher one’s budget is, the better the space will be in terms of location or size, and also the available amenities. They range from single family homes to high-end multi-bedroom apartments.

Rental homes meant for modest income groups are generally concentrated around the cheaper suburbs, while higher rentals occur in the classier areas of the city. Thus, rental housing caters to the whole spectrum of incomes.

As cities experience higher inflow of migrated population, the suburbs and surrounding spaces must develop their rental housing capacities to meet the demand.

Rental Property

Rental Housing Decreases Slums And Other Irregular Developments

In the absence of adequate rental housing in a city, migrating populations – especially the lower income groups – are apt to occupy slums or other kinds of irregular housing which tend to blight the urban landscape of growing cities.

This adversely showcases the quality of growth of the city, and also creates a range of problems that range from increased crime rates to sanitation challenges.

Affordable rental housing is therefore an important preventive of unorganized growth. With more families able to depend on rental properties, the city’s housing market as a whole gets more standardized.

Increased competition among property developers and agents ensures that real estate prices are managed within the ‘affordable’ range. This also goes on to boost the overall economy of the city.

Rental Housing Encourages Influx Of Valuable Talent

One of the primary concerns among the migrating workforce is the availability of adequate housing. A city that offers limited or unaffordable rental housing options will also not be able to maintain its skilled manpower equity.

The influx of qualified and skilled working population is necessary to encourage growing services sectors like healthcare, manufacturing, education, entertainment and retail.

In short, affordable rental housing must always be encouraged in a city which seeks to grow and prosper. A city’s town planning authorities and state governments alike must take heed of the fact that growth in the rental housing sector is a very essential quality and component of overall urban growth and development.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.