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“God created war so that Americans would learn geography.” … Mark Twain
“A man says a lot of things in summer he doesn't mean in winter.” … Patricia Briggs
“What the four seasons of the year mean to the European, the one season of the monsoon means to the Indian” …Khushwant Singh
War & Summer, both are important as war makes us realize how important peace is & summer makes us realize how important monsoon is… Me
Mark Twain was hundred percent right; thanks to the US's present President, he made us realize these words once again! About Patracia, come summer & our newspapers & society starts talking about rains & importance of water! Khushwant Singhs’ knack of putting difficult topics in the simplest way is well known & I only try to summarize these words of wisdom in my own way! Well, by the time you will be reading this sharing both, war & summer might have come to an end (hopefully) & I am sure never more than the last three months the entire country has waited to end war & summer & real estate isn’t exception to this! Though just the way even after the earthquakes the tremors keep threatening there will be the same reaction & then there is recovery time which will decide the fate of many segments (read as business houses & industries too). When the war started nearly four months back (28th Feb 26) & immediately it surrounded the safest city as well region in the world i.e. Dubai & UAE, many around the world were secretly happy, thinking the business houses which had run for their money will look for other regions as their next home. Logic is simple, war or no war, the world doesn’t stop for anybody & anything especially trading & financial companies which we call service sector. And many real estate pundits started giving India as next best destination for real estate as all these companies will be needing another base & hardly at two hours flight, with chances of war hitting very less than middle east, India is best option for UAE real estate i.e. Pune, Bengaluru, Hyderabad & Noida (well, where is real estate barring these four regions, anyways). And then add in it the man power available (tech slaves) here in abundance, logically the Real Estate Pundits were right & I am deliberately using the term were as in next four months things changed tracks faster than Race movie’s script (plz google) & here we are, at the end of war (hopefully) & facing the next war which is with nature!
I am not a Real Estate expert but a small timer by myself, but I am in this for last thirty plus years & has survived, that’s enough qualification & more than that my sharing’ are not to conclude or blame someone but its simple analysis of what I have been experiencing & what we can (or should) do about it; waidhanik ishara! Ok, for the impact of war, what the Pundits failed to assess or guess is, our dependency on many things which are so much part of our life & which decides our product’s costing also & all this can come at stand still due to a small strip of water way & overnight! Hormuz is now a common terminology & it feels like Kothrud or Hadapsar & what we forgot is, our entire real estate’s raw material barring cement & steel, depends on natural gas & oil & if a war happens in the middle east, then real estate here, also can get directly hit with it, which it has! In the last four months production cost of building industry i.e. home (read as construction) has soured up by nearly 20% & its just a rough guess because as usual going by the tradition of this industry there is no R & D in place to assess the exact damage. Though individual companies & professionals are working on their respective projects but again real estate is a very local industry & cut-paste solutions are not applicable here. At the same time aspects like transportation cost, storage cost, consumption, demand can vary largely according to a particular region & can have varying effects on the construction cost respectively. For e.g., cement is produced in central India & carrying it to Pune it has to travel nearly thousand kilometers & increase in rate of diesel is going to hit directly cement rate in Pune than Nagpur. Though for industries like cement where there are very few people it always rates of Pune to Nagpur & never vice versa, that’s how the system works in our country for real estate as there is no controlling authority!
And then there are items where petrochemical is directly involved such as paint, as well ceramic material such as sanitary wares & tiles which needs large fuel quantity for burning the furnaces, supply of which was at stand still for unavailability of fuel & then rise is oil rates making the manufacturers rising the rates of finished product! Again, a dent for construction cost impact of which is yet to be analysed by the industry! At the same time there is another war going on which on surface may not have anything to do directly with real estate but indirectly it’s a damage on the buyers of real estate & that is, threat of AI! Thankfully with man power & absence of technology & R & D in real estate though AI is not a direct threat yet jobs are getting lost all around the globe means lesser buyer for the homes as well for office spaces, means lesser revenue for real estate. This may not be fact, yet India runs on sentiments & sentiments says be afraid of AI & Aam Janata follows it. Of late, the majority of buyers in Pune & such regions are techno based & if they are afraid of the job itself how can they book a new, bigger home, is logic. They are in a mood of wait & watch & outcome is again lesser revenues for real estate, this is what we are observing around though we are either too afraid to acknowledge it or fool, in both cases facts won’t change, is my subject of sharing! And then there is USA which is set with all guns to make itself Great again, means more investors running towards USA & we already have world’s first trillionaire there while most of businesses in our country are striving to raise funds is a fact. And the problem with real estate is that you can't export your product, so we will have to get the buyers here to buy our homes, is something which our Mai Baap govt also should understand is my subject of sharing!
And the last nail in the coffin was delayed summer opening one more front for the war & its water front! Last year it rained 125% i.e. lot more than the average rainfall so we were happy & thought this year also will be same & our state’s elections were in the last year, needless to say the govt was busy in distributing water (and subsidies) like there is no tomorrow but nature doesn’t work like govt & it has shown us the tomorrow in the form of today’s draught! Yes, there is drought already on the front of water as it's the last week of June & we don’t have rains means even if from tomorrow we get heavy rains then it will still take a month just to fill up the deficit of water till now & which means less water for everybody! Imagine just a choke up in the supply cycle of oil can make such havoc what havoc there will be if the water supply chain gets choke up, this is something which the real estate industry must look at very seriously & act! Here many will say what can we do on the water's front, it's the government's responsibility, well govt has already shrugged it off by making developers’ give undertaking for everything available under the sun! Govt (read as sanctioning authorities) makes builder responsible for supplying water for the projects, drainage line, storm water lines, electric supply (at our cost for infrastructure), road & what not & on the top of this we are supposed to do a perfect quality product construction also which is our duty & yet keep the city green also! From where we are going to make money if we have to spend on all the fronts & we don’t have enough buyers who can buy homes at our quoted rates, is something not govt’s responsibility because govt doesn’t consider us as an industry or thinks we can take care of ourselves!
To add the salt on the burn (jale pe namak chidkana) there is one more war real estate has to face & that is war with local authorities about the policies which directly hurts (burns) real estate & latest drone or missile is in the form of RMC rates! In today’s construction concrete is an inherent factor & thanks to UDCPR (plz google) we have buildings to build with no space to store material at site & for that ready mix concrete popularly known as RMC is the best & only solution. For common people it's like Zomato or Swiggy for real estate as you order ready concrete for your site & vendors deliver it. These vendors, just the way hoteliers have cloud kitchens, have RMC making plants all around the city from which this concrete is delivered to the respective sites. Now suddenly (with due respect to govt) govt realized most of these RMC plants don't follow pollution control norms & has been ordered to shut as well their concrete carrying trucks are a menace for traffic of the city (as per police) & on most roads in day time these trucks are banned! (BTW, PMT busses also cause lots of accidents, imagine banning them on roads, just a thought of sarcasm) Outcome is, there was no concrete & the sites were at stand still for more than a month & finally few RMC plants started to operate as well limited hours transportation of concrete is allowed but all these things made RMC vendors to increase their rates by nearly forty to fifty percent & add increase in fuel rates in it, bang, hers goes construction cost again for toss, who cares, definitely not the govt! Why can’t we work out a proper solution for essential things like RMC & make it available at minimum price to the developers is my question! And then there are issues like use of treated water for construction for which builders are blamed that we oppose this idea (read as a genius idea) but nobody answers the question how to get treated water at site as regular tanker guys don't carry it as their tankers get useless for normal water. Then where to store this recycled water on site as its harmful for humans so it has to be stored separately along with the piping & pumping system. As well, who will take guarantee of quality of such water if we want to use it for construction as the wrong percentage of hazardous chemicals in such water can damage the quality of concrete & plaster, what about that? Nobody is ready to answer these questions, but the builders are supposed to take the blame for using good water for construction, especially when water war is in full swing.
This year’s summer is harsh & rains has been delayed but what about last year when we had good rains, what we did with that water, why the building norms are not being changed keeping water as focus point of construction, many questions with no one taking responsibility to answer them but we want builders to follow the norms & complete the building in time & affordable for the buyers , wow, lets ask AI, if it has got answer to this, is the only thing which comes to my mind! Guys, war, water scarcity are not things in our control but we have to take them in consideration & brace ourselves for the same as that’s called planning. For real estate friends also, we need to understand one very clear thing, whether we complete our flats & make some money or not, the govt is least bothered about it but issues like water & construction cost we must be aware about the same & keep a keen eye to tackle them or else whoever will be the winner of the war, may it be war with Iran or with water, the real estate only will end-up as a looser; adios with this warning!
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Sanjay Deshpande
Sanjeevani Dev.
Please view my sharing about finding a Right Home/ Office in Pune, at YouTube link below & share if liked...
https://youtu.be/27j3I3rwGPQ?
Please do visit my blog links below to read about real estate & home buying!
https://visonoflife.blogspot.
https://jivnachadrushtikon.
Creating Togetherness; team Sanjeevani Way (Click link below)
https://www.flickr.com/photos/
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www.punecorporation.org
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