Reaction To Union Budget 2017-18

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

The Union Budget has announced that 1 crore rural houses will be created by 2019, and the outlay for rural housing under PMAY is Rs. 23000 crores from the previous Rs. 15000 crores.

This will help address the housing needs of the homeless and those living in ‘kachha’ houses in the rural areas, and potentially help reduce pressure on urban areas if it is in conjunction with employment generation

The total allocation for infrastructure is a whopping Rs. 396135 crores in 2017-18. This is very good news for the real estate sector, as the correlation of infrastructure with real estate growth is a well-established fact.

Affordable housing has finally been given infrastructure status. This will mean cheaper loans for developers of budget housing and significantly boost the Government’s target of Housing for All by 2022.

The Affordable housing has seen a significant change in the Government’s existing scheme, with the qualifying size requirements now changed from built-up area to carpet area of 30 sqm and 60 sqm for projects within the municipal limits of the large 4 cities.

On the all-important front of personal income tax, the existing tax rate for incomes between Rs. 2.5 lakh to 5 lakh has been reduced to 5%, and taxpayers in other categories will also save Rs. 12,500.

While this will definitely boost the overall consumption story, it, unfortunately, will not have any significant impact on housing demand.

However, the FM did indicate that lending rates are likely to come down in the wake of the demonetisation move. A decline in interest rates would have positive implications on housing demand.

8 Expectations the Real Estate Sector have from Union Budget 2017

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

The real estate sector has been the second biggest employer for India after agriculture, and market estimates suggest that it will grow by as much as 30% in the next decade.

Consequently, stakeholders have high expectations from the 2017-18 Union Budget. Here are 8 such changes that the industry and its stakeholders are unanimously looking forward to:

  1. Income tax relaxation

As of now, the tax deduction limit for home loans is just Rs. 2 lakh, which becomes insignificant when you take into account the high prices of properties in our larger cities.

In Mumbai, for instance, the standard housing price is Rs. 1 crore, so the current tax deduction limit is insignificant for homebuyers in the financial capital.

Apart from extending the tax exemption for home loans to at least 5 lakh, the budget should also introduce concessions on insurance premiums to encourage buyers insure their property.

  1. Increase in HRA deductions for the self employed

Salaried individuals already get HRA (house rent allowance) as a component of their income, and can also claim deductions on it.

However, self-employed individuals are limited to only Rs. 2000 as a maximum deduction on HRA as per the provisions of Section 80GG. The 2017-18 Union Budget should address this dichotomy.

  1. Standardize construction materials

A major reason for increasing home prices is the constantly escalating cost of construction materials like cement and steel.

Standardization of such materials can help reach tax clarity and also make real estate a viable opportunity for investment.

  1. Single window clearances for real estate projects

As per the usual process, real estate projects need to go through a long line of approvals, and this bureaucratic process has been resulting in delayed deliveries.

Single window clearances have been a long-awaited step to reduce these bureaucratic setbacks. Once in place, it can give a major boost to the market.

Union Budget 2017

  1. Simpler tax norms of REITs

Until today, the real estate sector has not benefited from any REIT listings, with the model in its current format still weighed down with multiple taxes.

Taxation for REITs needs to be simplified to allow developers and investors to benefit from REIT listings. It is necessary that the Union Budget 2017-18 recognizes the importance of REITs and provides:

  • Lower taxation on REIT income
  • Reduction/removal of service tax with leased premises
  • Waiving capital gains during transfer of property to REIT
  1. Better GST Clarity

Although the GST (Goods and Services Tax) structure has been declared, stakeholders are eagerly waiting to understand the rates applicable to the real estate / construction industry.

We seek clarifications on abatement schemes, and scenarios when developers use composition schemes and the resultant credit for input tax.

  1. Financial protection with project delays

Currently, the interest deductions associated with self-owned homes has been limited at Rs. 2 lakh. However, for projects under construction, the deductions applicable are just Rs. 30,000. Further, the applicable period for the interest is 3 years, starting from the year that the loan was approved.

This has proved to be a hardship for property buyers and investors. Union Budget 2017-18 should focus on further interest deductions in late deliveries and also amend the period of repayment from the year the possession was due.

  1. Clarification on PMAY beneficiaries

According to a recent announcement by the Union Government, a 3% interest rate is applicable for loans up to Rs. 12 lakh and 4% up to Rs. 9 lakh, as per the PMAY (Pradhan Mantri Awas Yojana) scheme.

The scheme also states that two new income categories have been added to avail higher loan amounts with higher subsidies. We look forward to further clarifications on the definition of these beneficiaries.

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 projects like Montecito in Sahakar Nagar and other 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 Makes A Real Estate Investment Location Lucrative?

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

A simple Google search on real estate investment locations will throw up hundreds of results. Finding genuine online advice – the kind that can lead you to a truly lucrative real estate investment decision – is like finding the proverbial needle in the haystack.

The Internet’s usefulness as a tool to guide your property investment decisions depends upon the individual’s capacity to read between the lines of a mammoth amount of information which may or may not lead to house one is looking for.

Year 2017 should be a year for residential real estate investment, as the Government is ensuring low interest rates and a slew of incentives via schemes such as the Prime Minister’s Awas Yojana (PMAY).

So, interest in and appetite for real estate investment is back in force – but where should one invest? After all, successful real estate investment is proverbially driven by ‘location, location, location.’

When you are trying to identify the right location to invest in, you are obviously ready to put up a lot of saved or leveraged capital. This is no time to rely on sponsored advice and blanket generalizations.

What must come into play here is some basic knowledge of what makes the real estate market tick, and more specifically what drives demand in any location. The viability of a location is what will result in the hoped-for returns on investment.

So, how does real estate location viability actually work? From a residential property investment perspective, every city – especially if it is a tier 1 city – has its hot investment corridors, and other micro-markets which are simply not working currently.

Some of the important real estate drivers to look for are employment generation, infrastructure creation and historic price growth.

Mumbai, being the country’s financial capital, has been attracting massive investments over the years despite its astronomically high ticket sizes.

Bangalore has become India’s prominent Information Technology capital and been attracting consummate investments.

However, Pune has begun stealing Bangalore’s thunder as a preferred InfoTech destination, owing to:

  • Better real estate affordability
  • Global reputation for Business Process Outsourcing (BPO) services, and
  • Massive wealth of trained workforce.

The third factor is a very important one, and plays a big role in the city’s viability as a real estate investment destination.

Pune Mumbai Bengaluru

Pune – the veritable ‘Oxford of the East’ – has numerous high-quality educational institutes which regularly churn out graduates who are directly absorbed not only into the city’s IT firms but also into its manufacturing belt and services sector.

This directly translates into housing demand across a broad budget band, and in various locations of the city.

All such cities have micro-markets which are suitable for either commercial or residential investment, and others that are probably avoidable right now.

Because of the amount of business Mumbai, Bangalore and Pune generate – and the fact that they are in the cross-sights of many large commercial players – these cities are excellent choices for commercial space investments as long as:

  • One picks one’s location and property size wisely
  • Achieves a reasonable entry point in terms of ticket size

Commercial real estate investment calls for larger capital and longer investment horizons, and ROI is generally derived from rental income.

Areas which are close to relatively affordable residential catchments or at least provide good connectivity to them should be favoured.

When it comes to residential real estate investment, it pays to remember that speculative investments may have played a role in escalating prices beyond affordability in some areas.

Several factors have now combined to drive out speculators from most Indian cities, and price corrections have occurred. If the prices have bottomed out or the location is still in growth mode, it is a good time to invest in it.

One should look for factors like proximity to workplace hubs, infrastructure availability – especially in terms of connectivity and public transport – and a decent saturation of social infrastructure such as shopping outlets, healthcare and schools.

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 projects like Montecito in Sahakar Nagar and other 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.

Demonetisation: Immediate And Long-Term Impact On Real Estate

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

PM Modi’s surprise move to remove Rs. 500 and Rs. 1000 currency notes from legal use came as a shocker to all Indians. As of now, everyone is still inconvenienced, but all Indians also realize the greater good this move will accomplish in cleaning out black money from the economy.

Crowds outside ATMs are already thinning out and life is gradually normalizing across Indian cities. However, the ones who will continue to be affected the most are obviously those who have been holding and transacting in large amounts of unaccounted cash.

When considering the business sectors on which the demonetisation move has greatest pertinence and effect, the real estate sector comes almost naturally to mind, and Indian real estate industry has historically seen a high incidence of cash transactions.

However, the large-scale turmoil that many market pundits have been predicting is an exaggeration. The market is expecting a correction in the resale properties segment, which is very likely to happen.

The primary sales market in the larger cities is not going to be affected, especially when it comes to strong, established developers.

Prices have already stabilized in view of the situation prevailing prior to the demonetization move, and there is minimum chance of further correction – especially in low-end projects. High-end and luxury projects may see a correction to some extent.

Land transactions, which have historically been driven by cash, are taking a major hit and we can expect a correction of 20-30% in land valuations in the unorganized sector.

Lower land costs in emerging areas and smaller cities will eventually result in lower cost of budget housing, as developers will assuredly pass on the benefit of these savings to their customers.

Pricing is a critical factor in the current market environment, and no player will lose the chance to offer more benevolent price tags in order to secure business.

The full impact of demonetisation will be more visible only after the next Union Budget is announced in February. The negative sentiment currently prevailing is likely to be negated to a large extent by some very positive announcements.

We expect the Finance Minister to roll out special incentives for first-time home buyers in the budget properties category, and also a positive revision of income tax slabs – which will help reduce the financial burden on home buyers and increase purchasing power.

With home ownership always being a priority investment objective for all Indians, this will have very positive implications for the residential real estate sector.

DEMONETISATION

On the whole, the demonetisation move is very good news for the health of the Indian real estate sector. The Real Estate Regulatory Bill (RERA) will be deployed across the country by mid-2017, and Maharashtra has recently put forth its own draft laws.

Along with the impact that the demonetization move has had on India’s parallel ‘black economy’, we will see a lot of sanitization in the industry.

The Indian real estate sector will now become more transparent, credible and attractive to all kinds of serious investors, especially institutional investors.

In the long term, we will see a much more holistic and healthy pattern of growth in the Indian real estate sector.

The Government’s many initiatives to render the Indian business environment more attractive for both domestic and foreign investments will definitely bear fruit.

For end-users and investors, the current time is extremely favourable to make their move to secure the best real estate bargains.

Smaller residential developers and investors will be more eager than ever before to offload their inventory so as to alleviate their liquidity woes to some extent.

The salaried class which uses home loans to purchase properties will not face any problems at all because of the demonetisation move.

Since the above measures will serve to make the real estate sector more transparent and wholesome, future growth in the residential property sector will be steady and rational.

Those who invest in residential real estate now can, therefore, look forward to very satisfactory long-term capital appreciation.

Also, to be noted – the slowdown induced by the demonetisation move has nothing to do with the huge pent-up demand for housing in India. This is still very much intact and in fact growing at steady pace.

The residential sector was in fact in revival mode shortly before this move, and though overall sentiment has now faced a new setback, this is strictly temporary.

Fly-by-night developers get driven out and large players who have already made transparent transactions a standard will emerge stronger.

Within the next 12-18 months, we will see a much more sustainable and robust real estate market emerging in India.

About The Author

 Kishor Pate, Chairman & Managing Director ofAmit 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 projects like Montecito in Sahakar Nagar and other 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.

Festive Season 2016 Marked By Improved Realty Sales

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

To align with this year’s festive season, real estate prices have moderated to a significant extent in many markets. Also, developers have been proactively rolling out attractive offers and schemes, which have ensured that the 2016 festive season presents a visibly improved picture in residential sales.

A vast number of fence-sitters have been returning to the market with firm purchase decisions. These are primarily buyers who were awaiting price corrections and offers from developers which make financial sense. Both of these have happened, and sales have increased by as much as 10-12% so far.

In cities like Pune, which still offer favourable price bandwidths to end-users and investors, we have seen an increased sales velocity of 15% in well-connected growth corridors like Undri-Pisoli, Ambegaon and Bhugaon.

The speed of sales will increase by 12-15% in most markets by the peak of this year’s festive season. All-inclusive pricing packages which include VAT, stamp duty and registration have been the most successful offering by far, as these negate the financial uncertainty of hidden costs.

Another factor which has helped increase sales velocity is developers’ readiness to bargain with genuine buyers so as to achieve a price which works for both. Another influencing factor has been faster infrastructure development in emerging locations, thereby rendering them more attractive as residential destinations.

That said, not all projects have been performing equally. With the recent media spate surrounding illegal constructions in cities like Pune, buyers are now showing a marked preference for projects by reliable, reputed builders in superior locations.

woman holding diya

Also, flats which are either ready for possession or within six months of possession have been drawing the most amount of interest. The fact that the increased demand is almost exclusively for projects by well-established developers is significant – buyers and investors are in no mood to gamble this year.

The increased sales velocity of this year’s festive season will probably not sustain during the remaining part of the year, but there is absolutely no doubt that buyer sentiment has improved significantly.

To sustain the forward momentum, builders will have to complete their ongoing projects with convincing speed and provide all the promised amenities to satisfy their customers.

There has always been good demand for properties priced within the bandwidth of Rs. 35 to 50 lakh; however, we are now seeing a resurgence of interest even for luxury offerings priced in the higher bandwidth up to Rs. 80 lakh-1 crore, as buyers and investors can see that the real estate market appears to have stabilized and bottomed out.

There is a marked improvement in overall sales velocity, and we expect to see a further turning point will come by mid-2017 and even earlier if the annual Union Budget is preponed and announces decisive benefits for the middle class.

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 projects like Montecito in Sahakar Nagar and other 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 Drives Housing Demand In Pune’s Kothrud?

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

Quality of life was once a defining characteristic of Pune, but thanks to the lag in infrastructure to support the rapid development in the city, this characteristic has become rare in most areas.

In previous times, it was of no real consequence where one purchased a home in Pune – all areas which saw real estate development offered a good quality of life. Today, while scoping the market for flats for sale in Pune, it is necessary to factor in a number of variables.

The most important aspects to consider are traffic congestion and pollution levels, whether the area offers a good availability of basic facilities and, of course, the overall ambience and quality of the neighborhood.

Kothrud, a western suburb of Pune, is one area which has always offered residents a very high quality of life. It is one of the core traditional areas of Pune from very early times. In fact, it features prominently in the recent Hindi blockbuster film ‘Bajirao Mastani‘ because it is in Kothrud that Mastani’s resided.

In the era of the Peshwas in which ‘Bajirao Mastani‘ takes place, the area was called Kothrud Baug. It still boasts of several high-profile landmarks such as the Dashabhuja temple and Mrityunjaya temple, which date back to the glorious times of the Peshwas.

Kothrud has always been a highly progressive area, seeing many ground-breaking infrastructure projects far ahead of the rest of the city to make living here more convenient and comfortable. In fact, the city’s very first flyover connecting Karve Road to Paud Road, was erected in Kothrud. It also has superlative connectivity to various parts of the central city via Karve Road.

Situated in the veritable nerve centre of Pune, Kothrud has witnessed rapid growth in its housing sector and was, in fact, identified among the fastest developing suburbs in Asia in the 1980s.

Considered one of the most upscale neighbourhoods in Pune, Kothrud has also seen rapid growth in its real estate prices. Kothrud was among the first of Pune’s suburbs to be developed, with its latter-day development beginning in the late 90s. In those years, Pune still held fast to its tag as Pensioner’s Paradise.

There was little economic activity happening in the city in those years, until Pune’s IT/ITES boom began to take hold in 2000-02. Even then, Kothrud was already a fully-developed residential location. This is why this area did not suffer from the over-development that beset areas like Aundh and Baner in the West and Viman Nagar in the East when they got on the IT/ITES bandwagon.

Throughout, Kothrud has been seeing a lot of demand from real estate buyers from both within the city and neighbouring Mumbai. Given the massive amount of interest from both end-users and investors, developers in Kothrud have always been offering progressive housing formats and succeeded in making it one the most desirable core area to live in.

Source: Google Maps
Source: Google Maps

Real estate buyers and investors are attracted to Kothrud both for its superior housing options and the convenience of living there. The civic infrastructure is top-grade, and the social infrastructure in terms of shopping, educational institutions and hospitals is matchless.

Today, because of lack of developable plots and new housing projects largely happening in the form of redevelopment, new housing options in Kothrud are scarce on the ground even while demand continues to be enormous.

In the midst of this crunch for living spaces that befit the expectations of buyers considering Kothrud, Amit Enterprises Housing has launched its high-end project Ved Vihar. The project consists of four towers exclusively offering 2 and 3 BHK luxury flats, and is therefore perfectly aligned with the demand profile of this happening location.

With quality of life ranking as the top consideration for home buyers in Kothrud, housing projects must deliver on all fronts. Even as compromised infrastructure, air pollution and traffic congestions plague most of the other parts of the city, Kothrud is still a haven from the mounting humdrum and chaos.

However, this alone is not enough in real estate market terms. Given the premium pricing of this location, home buyers also expect the very best in amenities and facilities. Developers who provide these in their housing projects are seeing the highest demand.

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 projects like Montecito in Sahakar Nagar and other 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 Ultra Luxury Housing Defies All Market Trends

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

In India, the definition of luxury housing varies from city to city, and the demand for luxury homes in each city also differs. A plush 2 BHK flat in a central location or in an area near to corporate or IT employment hubs would qualify as a luxury home in Mumbai, Pune or Bangalore solely on the basis of location.

However, the classic Indian concept of a luxury home also involves generous size – so a 3 or 4 BHK apartment is definitely defined as luxury. As a rule, such luxury flats are built only by developers who have specific expertise in this genre, as apart from large size, customers look for highly evolved amenities and facilities to create the necessary luxury ethos.

What Drives The Demand For Luxury Homes

It is a mistake to club the demand for ultra-luxury housing with that of the rest of the property market, because the dynamics are very different. In the first place, the luxury homes market tends to be quite end-user centric in many cities.

The higher ticket sizes mean that only investors with considerable capital at their disposal are active in the luxury segment. The end-users who largely patronize the luxury housing segment generally do not need housing loans but buy such properties from their own capital, being from the affluent class.

Cities like Mumbai, Pune, Bangalore, Chennai and Delhi have their well-established high-value luxury homes locations. The people who live there have often been residents for several generations and are not open to relocating elsewhere.

These locations tend to have a rich share of natural ambience due to limited development norms being enforced there, and at the same time a high degree of social infrastructure which ensures that life there is trouble-free and convenient.

Among this location-driven buyer set, the demand for genuine luxury homes is considerable. Due to very limited supply in these areas, such properties often tend to change hands among this specific buyer segment.

Prices for such ultra-luxury homes are a function of both the high-value vanity addresses and the size and configuration. Rarely, a large family-owned property will be sold and redeveloped into limited-edition boutique homes which are immediately snapped up.

We can see this dynamic actively at play in areas like Cuffe Parade, Nepean Sea Road, Worli, Juhu and Lower Parel in Mumbai. In Pune, the specific areas for such luxury housing are Sahakar Nagar, Boat Club Road, Kalyani Nagar and Koregaon Park.

Since they are meant to function as family estates, luxury homes in such areas doubtlessly need to get the size factor right. Such extra-large ultra luxury living spaces are naturally expected to offer ultra-modern luxurious amenities which can be upgraded as technological advancements push the luxury envelope further up the value chain. These addresses may or may not be centrally located, but that factor does not, in any case, play a big role.

Montecito 3

Why Core Luxury Addresses Never Change

Spatial expansion of cities like Pune, Bangalore, Chennai and Delhi is constantly pushing the city boundaries further and in different directions. Simultaneously, new workplace hubs geared to the booming Information Technology sector spring up in the emerging locations, which IT companies prefer because of the lower property costs.

Residential catchments form around these IT hubs to respond to the demand for homes from their employees. These new residential areas usually see high demand for homes of all ticket sizes, including the more expensive ‘green homes.’

While these higher-end homes definitely fall in the category of premium housing, the locations themselves do not spell luxury. The same dynamic can be seen around large manufacturing hubs, where premium housing can be found in locations which have essentially have an industrial, blue-collar image.

Through all this expansion, a city’s core luxury address locations remain static and continue to hold sway even as the city itself grows in all directions.

These addresses have very little to do with Indian real estate’s primary growth driver, which is employment generation. They are the home of the city’s landed gentry – its long-established core of wealth.

Though property owners in these locations are often owners of very large businesses, they themselves are not dependent on quick access to workplace hubs. They have earned a far more leisurely life long ago, and their main objective and prerogative is to dwell among their peers in an environment untouched by the mass development in every other part of the city.

Immune To General Market Dynamics

The demand for luxury housing in these elite locations is therefore always steady. Developers who have the rare opportunity to create new luxury housing projects there will invariably have a dedicated inner circle of HNI buyers and investors who will snap up their limited-edition offerings.

Such housing is more or less impervious to the influence of recession, as the buyers are not dependent on home loans but largely use their own capital to buy such housing. The demand from investors and HNI end-users for luxury housing in the traditional core areas of the city is therefore always present.

When the opportunity to acquire properties in a new luxury project in such an area presents itself, such buyers will enter the project at the pre-launch or under construction stage to avail of the best rates.

The marketing strategy for homes in a city’s core luxury areas also differs significantly from the kind of campaigns developers use to promote mid-income housing projects. The marketing approach focuses more on the aspiration for exclusiveness and status among people who can afford to avail of it.

While word-of-mouth communication among core investors usually suffices to draw massive inquiries, developers will also advertise these offerings in prestigious lifestyle magazines, airport lounges and similar platforms.

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 projects like Montecito in Sahakar Nagar and other 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.

Sahakar Nagar – Pune’s Most Aspirational Neighbourhood

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

Pune is witnessing a very high rate of cross-border cultural exchange, with an increasing number of its citizens traveling abroad even as more and more international tourists explore the city each year.

The IT culture, glitzy shopping malls boutiques offering the latest in global fashion trends and international schools are all part of this process of cultural homogenization. Pune has become a truly cosmopolitan city, thanks largely to the influence of its burgeoning IT sector.

Nevertheless, the historical Pune – the city which holds on to its traditional values and outlook – continues to exist. Because of the mass-scale development happening all of the city, it is less visible today than it was just ten years ago, but the spirit of Punyanagari lives on in its core areas.

Sahakar Nagar is perhaps the most prominent of these strongholds of Pune’s traditions.

Sahakar Nagar needs no introduction to citizens of Pune. This elite residential area is one of the oldest, greenest and most respectable addresses in the city. The area was developed after the 1961 floods in Pune, and has become a prominent location today.

Sahakar Nagar is home to some of Pune’s most established businesspersons, politicians and movers and shakers, and has been a very exclusive and largely closed real estate market for decades.

Simultaneously, Sahakar Nagar represents a unique balance because it has retained the city’s traditional Marathi culture while at the same time evolving to keep pace with the times.

Aerial view of Sahakar Nagar, Pune
Aerial view of Sahakar Nagar, Pune

From the outside, the tranquil dignity and old-world charm of this venerable residential location gives no visible indication of change. However, Sahakar Nagar has been seeing a constant process of reinvention which has resulted in excellent civil infrastructure.

This area is unique in yet another aspect. Because of the fact that the residents of Sahakar Nagar will never want to move anywhere else, getting a resale home here is a huge challenge. Also, since it is fully developed and occupied for several years now, there is next to no new residential supply.

Sahakar Nagar is one of the last predominantly end-user driven locations in Pune, though investors are always keen to make a play in this distinguished luxury neighbourhood. It is a genuine stronghold of the city’s elite and affluent families that has never been open to investors.

The past few years have seen no new projects at Sahakar Nagar because of the lack of land. The primary residential configuration at Sahakar Nagar is bungalows and villas, which comprise most of the housing landscape of this high-profile location.

The resident profile primarily reflects Pune’s orthodox Hindu Brahmin community, which has helped preserve Sahakar Nagar’s reputation as one of the last outposts of the city’s traditional roots.

The location itself is perfect. At a high elevation, it offers a breath-taking view of the Parvati/Taljai hill area as well as thick reserved forest lands. Bharati Vidyapeeth, one of Pune’s most upscale educational institutions, has its campus close by.

The Pune-Satara road provides ready access to Swargate Bus Terminus, a vital transit hub in the heart of the city, as well as other key areas of Central Pune. The Mumbai-Pune Expressway is within easy commuting distance via the Katraj Bypass. Sahakar Nagar is also within a stone’s throw from City Pride Cineplex, and has its own integrated high street shopping area which most of the local residents patronize.

Thanks to its unmatched locational advantages and also its unique profile, Sahakar Nagar is a highly aspirational luxury address. Due to scarcity of developable space, top-class projects in the area are a focal point for high-end investors as well as families looking for prestigious permanent residences.

With next to no availability of residential units of any kind, Sahakar Nagar’s status as a stronghold of Pune’s elite stands unassailable.

Amit Enterprises Housing Ltd. established its foothold in Sahakar Nagar back in 2007 with the launch of the luxury apartment project 9 Green Park. This project was completed in 2012 and is, not surprisingly, completely sold out and occupied. However, another luxury apartment project by AEHL now offers the hope of home ownership in Sahakar Nagar to Pune’s discerning few.

Montecito Entrance Lounge small

Montecito – located adjacent to 9 Green Park – enjoys the most spectacular view yet of Sahakar Nagar’s legendary natural splendour. This ultra-luxurious apartments project, spread over 4.3 acres of Sahakar Nagar’s most breathtakingly beautiful hilltop location, consist of two 16-storied towers that offer 64 apartments backed by five levels of reserved parking. This unique project is designed by none other than renowned architects Talathi & Panthaki.

Answering the call for luxury living in Pune’s most treasured and highly exclusive residential addresses, Montecito is AEHL’s final brush-stroke on a priceless masterpiece called Sahakar Nagar – a location that always has, and always will, capture the very essence of all that is truly Pune.

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.

Compact Homes: India’s New Urban Living Standard

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

The parameters that drive urban living in India have been changing constantly. People from other parts of the country have been migrating into thriving cities like Mumbai and Pune to avail of the better job prospects there.

While real estate developers have been attempting to cater to the rising demand for housing, urban land prices have been rising and with them the cost of homes. This has given rise to the trend for compact homes near these cities’ main office locations.

Perfect residential solution in urban areas

The affordable prices of smaller homes are not the only reason why compact flats are now the first choice of people living urban areas. Of course, the price differential does play a major role. After all, bigger apartments of 3BHK and 4BHK configurations are very expensive.

At the same time, 1 BHK flats are considered too small for growing families. This is why 2BHK apartments are now in highest demands among urban families. Particularly designed for the working middle class, such flats are more suitable as well as affordable for nuclear families. In fact, the compact 2BHK apartment is now considered the new luxury standard.

Projects with 1BHK, 2BHK and 3BHK options are not new in a city like Pune, but they have some inbuilt limitations. The biggest limitation is that such projects result in very disproportionate neighbourhoods, with several families having bought homes in different budgets.

However, projects comprising exclusively of compact 2 BHK flats – a new trend that is catching on in a big way in cities like Pune – provide a setting where all home buyers come in at the same level. This results in uniform neighbourhoods whose residents are evenly matched at a socio-economic level.

Home Construction Plan

Why Compact Homes Rock The Middle Class

– The size is right: Compact 2BHK flats are small enough to be manageable for small nuclear families, yet large enough to accommodate their future growth in terms of children.

– Makes ‘space’ for other investments/expenses: Home buyers who are on a budget but still want to enjoy the benefits of a good, well-connected location prefer such flats. Real estate developers who focus on this demand segment are able to achieve economy of scale by building vertically on relatively smaller plots.

– Cheaper than larger apartments: While investing in a property, the primary concern for the Indian middle class is price. Not only are large properties that are extremely expensive out of reach for them, but the money that is saved by buying a smaller home can be invested elsewhere or utilized in some other manner to achieve yet another important lifestyle goal. Today’s upwardly mobile young Indians want to travel, invest in nice cars and get the best possible education for their children.

– Smartly designed compact homes maximize space: One of the first things one notices in many larger flats is that lots of space is wasted, or not being utilized optimally. Because space saving is not only a virtue but a necessity in urban areas. Compact 2 BHK homes can be designed in a manner that provides space for everything while no space is wasted. Such smart designs help in using smaller areas in the most effective manner.

– Easy to maintain: In today’s extremely busy and hectic life, they watchwords are convenience and low maintenance – especially in one’s home. Compact homes are easier and more cost-effective to handle and maintain than large apartments. Electricity bills and maintenance bills can be reduced significantly in such homes. Also, they require less furniture and décor.

– Freedom and flexibility to design the home: The interior design of compact homes can be designed easily and cost-effectively. Guided by the latest trends in compact home décor, young Indian families are able to transform their smaller flats into extremely stylish spaces within small but intelligently allocated budgets.

– Great savings on transportation: Transportation expenses can be reduced greatly with compact homes which are located in well-connected areas. Because the developers of such projects locate them in close proximity to commercial areas like offices, banks and shopping malls as well as, schools, colleges and hospitals. Thanks to their better connectivity and social infrastructure, well-located compact homes are becoming first choice of home buyers in urban areas.

– Higher scope of resale on the property market: The demand for compact homes in well-connected urban areas is rising constantly, with more and more people looking to purchase such properties and benefit from their many advantages. Therefore, the resale value of compact homes is always high and such homes are sold very quickly, as there are always prospective buyers. This means that owners of compact homes can exit their investments easily and at a good profit if they find the need to relocate or move into larger homes.

Small in not only beautiful but eminently practical and sensible for the contemporary urban citizen. With so many advantages to owning compact homes in well-connected neighbourhoods, this is one real estate market segment that will not only hold its own but grow exponentially in the years to come.

Such a home is the ultimate place to live in, as well as a matchless performing asset from the perspective of real estate investment.

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.