Better days ahead for realty

Chennai Realty trends

The growth of banking and health care was the office market absorption trend that continued during September as well. Among the major transactions specific mention should be made about World Bank leasing space in Perungudi, Lyca Health in Nungambakkam and Caterpillar in Taramani, according to JLL survey for September.

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On the retail front, most of the reputed retailers preferred high streets for expanding their footprints in Chennai. Major transactions include Anjappar and Concorde Motors leasing space on OMR and Shree Mithai at Nungambakkam. As regards residential property, Chennai witnessed moderate increase in the number of new launches in key micro markets.

In a related development, Chennai court has passed a new order stating that the landlord is entitled to receive only one month's agreed rent by way of advance and any amount paid in excess of agreed rent shall be refunded or adjusted towards rent. This has been a major point of discussion among many, especially those who have been looking for options to rent a home. For a city where the advance sums up to several thousands, the judgement has been a major source of relief.

Better days ahead for realty

With the RBI reducing the repo rate by 50 basis points, industry sources expect that fence sitters would be able to firm up their decision making leading to a spurt in the quantum of enquiries as well sales. The SBI has already taken the lead by announcing a 40 basis points cut on lending rates for home loans to 9.3% and Andhra Bank to 9.75%.

A significant development is that the minimum risk weightage on individual home loans for low cost homes will be reduced which will be a boost for the development as well as absorption of low cost homes in the coming months.

Source - TOI 

Infographics: Latest Chennai real estate trends

The second quarter of 2015 was slightly subdued in Chennai as it witnessed a decline in the launch of new units as compared to the previous quarter, reports the April-June issue of PropIndex, India Apartment Index by Magicbricks.

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While there was a fall in the number of new mid-segment units, the high-end and luxury segments showed a marked improvement. 

With the need for affordable luxury going up, areas such as Nungambakkam, Adyar, Alwarpet, Kotturpuram, Egmore, Bishop Garden and Perambur are emerging as the new luxury addresses and  witnessing high growth.

A major percentage of the new launches were in the Grand Southern Trunk Road and Suburban (South) areas due to their proximity to business districts and IT Parks. Limited demand and modest sales kept the capital and rental values stable during this quarter across all submarkets.

For rentals, Alwarpet, Ambattur, Anna Nagar, Besant Nagar, Kelambakkam have shown a rise in values in the Apr-Jun 2015 quarter. The real estate sector is mostly driven by demand from the IT segment. This demand continues to push prices northward, forcing people in the mid-segment to explore options in the peripheral regions. But lack of physical and social infrastructure acts as a deterrent.

Source - MB 

4 key points to know about Chennai real estate

Real estate is undergoing a sluggish phase but developers announcing their luxury launches, buyers constantly searching for properties online and an increasing momentum visible within the local market may mean that you can hold on to the Chennai market.

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Expect affordable

If you were looking out for an affordable property in Chennai, perhaps now is the time to get active with your search.

In areas, such as East Coast Road, developers are also trying to come up with affordably priced villas, flats and row houses. “This is to boost sales in the sluggish market. Buyers expectations such as price correction may not be a practical route but if physical infrastructure and road repair (road widening) progresses well, a lot of land that is otherwise considered remote would open up to development thus opening up a chance for real estate sales and at affordable prices,” says SB Gururaj, Trend Homes.

Will ECR replicate Old Mahabalipuram Road’s success story? We will need to wait and watch.

The following figure gives you an overview of what is available within your budget range in the Chennai market.

Chennai Metro – will prices go up?

The happy commuters in the blue and green coaches of the Chennai Metro are not the only happy people around. With the metro rail being flung open for public use, real estate enthusiasts have been trying to analyse the market- will it or won’t it lead to capital appreciation? Take for example, real estate prices in Ashok Nagar. What stood at roughly Rs 7,500-8,000 per sq ft in 2011 now stands at an average of Rs 10,000 per sq ft.

“There has been a sizeable rise in prices if you look at prices when the Metro was announced, that is in 2009 and now. However, these areas were established even back then and the impact of the metro cannot be taken in farfetched terms. There has been a good 15-20 per cent rise in property values despite the sluggish phase over the last two years,” says P Sampath of Cityproper Homes.

“As of today, rental values are going up more visibly,” adds Sampath.

If you take the example of Alandur and its immediate premises, real estate values can go up to Rs 6,500 per sq ft compared to an average of Rs 4,500-5,200 per sq ft for homes at a distance. Prices are still going up and can go up in the nine stations on the green line which is yet to be operational,” says Krishna Murugan of MK Homes.

In other areas such as Guindy and Anna Nagar, reputed developers are coming up with their projects along the metro corridor. Trend watchers feel that although residential real estate prices may not drastically go upside, commerce might be favourably impacted in areas close to the metro corridor and this in turn will impact residential real estate prices. Meanwhile developers have also been lobbying for a higher FSI. Time will tell whether the state government obliges.

Redevelopment, anytime soon?

Mount Road or Anna Salai has been in news for not only the metro. There is a long overdue redevelopment plan along this 12 km stretch which is an important transit corridor with many commercial buildings and offices in its fold. Aging infrastructure which hasn’t kept pace with urbanization herein has raised hopes for a redevelopment plan. A higher FSI and a detailed land pooling plan is the need of the hour.

Luxury grabs attention

While real estate would have taken a back seat when it comes to the number of transactions in the last two years, there is an interesting trend we notice. Part of redevelopment makes sure that new parcels of land – formerly used for industrial and other uses have been taken up for residential use. On large land parcels, you could now expect luxury townships making a big impact.

Chennai's delayed satellite township gets a boost

Chennai

The much-delayed satellite township project at Thirumazhisai near Chennai will finally see the light of the day with the Tamil Nadu Housing Board deciding on consultants to prepare a detailed development plan.

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Also, a consultant has been selected to prepare a development plan for a similar township at Thoppur-Utchapatti in Madurai. The consultants will also study the financial viability of the projects and submit their reports in three months. While the project size at Thirumazhisai near Poonamallee has been scaled down from 311 acres to 138 acres on account of land acquisition problems, the Thoppur project will come up on 573 acres.

The Thirumazhisai project, aimed at providing affordable housing to the low income group and economically weaker sections of society who have been marginalized by private developers who predominantly cater to the needs of middle and upper middle class families, was announced by the present government about four years ago. The project was to come up in Chembarambakkam, Kuthambakkam, Parvatharajapuram, Narasingapuram and Vellavedu villages.

"The work order for the consultants was given last week to commence the study immediately. The phase I of the project will begin in 138 acres," a senior government official said.

Local people in Thirumazhisai have been opposing the project citing that it would have detrimental effects on Chembarambakkam lake, a primary drinking water source for Chennai city. The biggest problem the housing board faces in the region is that of land encroachment. Villagers have encroached upon a major share of the acquired land, and are cultivating paddy there.

V K Sukumar, a farmer from Vellavedu alleged that the government was bent on acquiring cultivable agricultural lands. "Even during the drought in 1980s, we had raised three crops here. Residential units will ruin farm lands," said Sukumar, who has challenged the acquisition of his three acres. Over 50 farmers have moved courts against acquisition.

Source - TOI chennai