Chennai
Plagued by uncertainties and a lukewarm response from buyers, the realty market is now opening up to new developments which have created a positive investment environment.
Real estate, by large, is a dependent sector. The success of the realty market relies on many factors. It is interesting to see the developments that governed this sector in Chennai as we draw closer to the end of 2015. Though witnessing slow growth, there have been many developments which promise a better scenario in the coming months. The start of the metro rail service early in the year enabled adjoining areas to enjoy high demand and rise in rental rates. The announcement of the smart cities project at the national level also stirred market sentiments. The success of the recently organised Global Investor's Meet (GIM) opened up windows for foreign investment in the realty sector like never before.
T Chitty Babu, chairman and CEO, Akshaya, attributes the positivity in the market to the GIM. He says, "The overall sentiments in the market have improved with GIM happening in the city. The plans for industries and the nature of investments planned over the next two years will help in job creation and will further be a driving factor for the real estate sector." He believes that Q3 of FY16 will be phenomenal and 2015 will end on a high note.
The recent rate cut by the Reserve Bank of India left the market abuzz with prospects of growth. Development of social and physical infrastructure has been another aspect which has encouraged establishment of new projects.
While the demand for IT and SEZs remained stable, residential sale also improved in the period. Sarita Hunt, managing director, JLL, Chennai and Coimbatore, says, "Residential sales improved significantly. Improved home buying sentiments along with developers offering discounts supported housing sales during this period. Submarkets in the southern and western suburbs contributed to most of the residential sales. With more quality projects being launched in these locations they are witnessing improved sales. Investors, however, are cautiously optimistic and have been undertaking significant research before concluding any investments. New launches have been less as compared to the same period last year and with improving demand the overall vacancy in the market has also been reducing."
The market has picked up as the first two quarters of the current financial year ended and experts believe that it will be a smooth road ahead. Sachin Sandhir, Global MD, Emerging Business, RICS, says the smart cities project is perfect to revive and drive growth in the affordable and mid-segment housing segment in Chennai as the city is primarily end-user driven. He says, "Inclusion of Chennai in the list of smart cities will help push property demand in this region. The city has seen a lot of activity with several investment proposals by the government and global companies. The metro rail project and the Bus Rapid Transit (BRT) will act as a catalyst to the infrastructure development of Chennai."
Surendra Hiranandani, chairman and MD, House of Hiranandani, says, "In a bid to boost demand the government has also undertaken initiatives like incentives for infrastructure financing by the RBI, lowering of interest rates on home loans, framework for Real Estate Investment Trust (REITs), relaxation of FDI norms in the construction sector. We hope to see the effects trickling down in the near future."
Source - TOI
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