Sunday, January 8, 2017

Real Estate, City & New Year 2017!

 “It’s not the first step but the direction in which you take it is what decides your fate” … Lao Tzu.

What wonderful words from the great Zen Master, to describe the scene on the horizon of real estate to start another year! And indeed the passing year i.e. 2016 was one that many from real estate will definitely like to forget it as early as possible; such was the scene in the industry. Every possible bad thing has happened in 2016 right from controversies over TDR policy making projects delay to PMC’s inability to get the new DP sanctioned in time to poor infrastructure making flats non-salable to ready reckoner rates hike & then demonetization came as last nail in to the coffin! With due respect to Hon PM’s intentions yet it’s the rumors which was outcome of demonetization, that property prices will fall further even to extent of 30 %, which has hit the industry worst. Because most buyers, even those genuine ones too preferring to wait for the price fall of homes; making sale of flats come to standstill! 

On this back ground while I started writing this sharing, thankfully the 2017 seems to have some real good news ahead for e.g. the Pune’s Metro has been finally seen the day light as bjoomipoojan has been done by the hands of none other than PM himself, so at least to protect his credibility, the State Govt will peruse the project on priority is we can hope! Then with demonetization, banks have been flooded with funds & SBI which is biggest player in home finance as well project finance to real estate has cut down the interest rates by whooping 0.9% & so are following the other financial institutes, making home loans cheaper. This will surely help mid segment where every single rupee counts when EMI is concerned. At the same time DP i.e. development plan of PMC also has been signed by CM at last, as it was become more awaited that Janhavi’s baby, (a popular TV serials character’s delivery news, which has become laughing stock of social media, such was the way the story has been dragged of that serial). Also projects like ring road & air-port, which will be having a long term impact on Pune regions development especially real estate development also has been cleared & PMRDA’s also moving fast of their DP. Another major aspect of 2017 is it will be deciding Pune & Pimpmpri Chinchwad’s rulers fate i.e. elections of PMC & PCMC are due in first quarter of this year so for next five years where the city development will head, is also equally important for the city’s real estate. As if BJP wins then Galli to Delhi there will be same ruler, not that it makes any big difference as it was like that for nearly fifteen years barring last two but it hardly has made any difference to city’s real estate & need of homes!

I really wonder what our rulers thinks of Pune as they want all the advantages they get from the city i.e. right from revenue by IT industries, numbers of skilled hands which passes out every years from thousands of education institutes in Pune, millions of jobs which this city provides through its auto & service industries yet when it comes to provide simple basic infrastructure, the city is getting poorer by every passing year on that front! The city needs homes but so many things right from simple things like getting approval for development plan like basics keeps on getting delayed for reasons known only to the rulers. Then there are pending decisions like merging of fringe villages’ as well giving authority & funding to bodies like PMRDA for essential infrastructure because of which entire development has got stuck in fringe areas which is only hope for providing affordable homes. Even the Zillah Parishad which is oldest public body which is supposedly takes care of civic infrastructure out of PMC & PCMC limit has been failed repeatedly for doing the same. This has made lives of millions of citizens living in & around Pune miserable as they have a home but which don’t have any proper roads, public transport, water supply, drainage, garbage disposal & the list goes on & on!

Though the DP of PMC has been cleared by the CM yet again politically sensitive issues like BDP along with few reservations has been kept on hold, such jokes can happen only in this State & Country! Means it’s like your total body’s city scan has been done but the technician will not give you report of few parts of your body & yet the patient has to be examined by the doctor for diagnosis! How can such jokes the govt system allows, as just it will affect some election you keep on hold entire policy like bio diversity park i.e. BDP which is most important for city’s future as well environment! Same is story with issue of Metro Depot or terminal as earlier on the same location reservation for making Memorial of Shivaji Maharaj was proposed. Now the govt is in fix whether to cancel that reservation as that land is important for Metros aspect but this decision will disturb the caste equations! Actually one has to have guts when you have power in hand & it’s not some caste of person but entire city’s future has to be thought! No one says don’t build memorials but even the Shivaji Maharaj himself while building his forts has thought of citizen’s convenience on the top of everything, let’s not forget this! Though the Metro also has been announced by none other than the PM himself but looking at our past, time lag between the  announcement of any project & coming that project in actual use of the citizens is too much  is a fact! Even the TDR policy along the Metro corridor is in dilemma as there is no clear stand about whether to give 4.0 times FSI along the Metro corridor or use some other means to promote the Metro. AT the same time Metro alignment matter is in Green Tribunal as nearly 1.7 km route is through river bed. I have seen many cities across the world but nowhere Metro or any such development has been done through the river bed; yes under the river there are rails & roads in tunnel form as that doesn’t harm the river bed & biodiversity it has. It will be interesting that even after PM himself has announced Metro, what if NGT doesn’t allow the Metro through river bed? Has PMC or Metro Rail Company kept plan B in hand is the question. Along with Metro the local bus service also is equally important as Metro completing may take at least six years even if its completed in specified time & till that time the number of vehicles will go over six millions & people need to get used to public transport by then. So PMPML has said to get nearly 1200 new busses at their service, thing is they need to carve new routes as well & supporting infrastructure like bus stops, well equipped depot & terminals to park these busses safely.

I think focus of DP hereafter must be around the pollution threat which looms over the city as in long term that will be beneficial for the city real estate. Many won’t agree with my statement but I have repeatedly stated backbone of the real estate in this city is its cultural, social & natural resources rich status which it provides to the citizens! From all over the country people want to come to Pune & make this city their home because there is something in this city which makes them feel comfortable & fall in love with her! And it’s this emotion or feeling we have around which we have to plan the DP or develop the city. Now with DP at least most of it sanctioned second step is more important i.e. to execute it in time bound way. Imagine if it took 10 years to plan the DP & get it sanctioned, then how much time we will need to execute it?

New Year as I mentioned above will decide new rulers also as on all radio FM channels Pune’s Hon Mayor is telling people about various schemes by PMC, most of them we have been listening for more than ten years by now & few we came to know only via these advertises! In one of the advertise Hon Mayor tells us about “Project Light House”, under which PMC will be giving skills training to teen age kids! Which kids? What criterions for selection? What skills & how many of kids by now has been trained under this scheme as well what they are doing after they got training? Many such question which you can get answer only via election polls is what I feel! This city can’t even have clean public toilets & we talk about training younger lot of the city, I really get amazed how blind folded we can be! And suddenly just before election how come Hon Mayor realized that the citizens should be informed about PMC’s proactivenss regarding the citizens! Same is announcement of giving two time water supply, but no one speaks about why it was one time for entire year? I think like the real estate guys, our rulers also should realize that no more fooling to the common man.

On all these back grounds real estate industry must have learnt its own lessons by now. As without literally any infrastructure support whatever growth the industry has seen it has come from the genuine demand the city has generated. Till now there was a phase where every day saw new high in property rates but the scene won’t be same ever. As with demonetization as well sentiments are at lowest level in auto as well white goods. At the same time buying capacity has been reduced for the common man due to day to day expenses. No more people are looking for just high end specifications & plush locations as well the investors are out of market for a while, though by me that is a good thing! The New Year also saw RERA implementation intimation by Central & State govts which is like a sword i.e. it depends how you use it. Clients have become aware about their rights & law is on their side, so better the real estate also follows fair practices. Don’t run behind speculation, may you be a builder or a flat purchaser & look for need than greed! Real estate is hoping that with lower interest rates & banks swelling with deposited funds, there will be up mood in buying which I doubt, because just for cheaper loan no fool will buy the home but there should be right deal in first place! 

I listened to one more commercial on the FM channel, it’s a teaser welcoming New Year & it’s says, “Saal badalnese kuch nahi hoga, khudko badlo”; means our fate doesn’t change by change of some year on calendar but it changes only if we change our-self! The real estate should take a lesson from this commercial as that is what the buyer also expects & I think if it happens then that’s true Happy New Year for the real estate of the city!

Sanjay Deshpande 

Sanjeevani Dev.

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