Chennai
Residential apartment prices have increased marginally in most micro-markets in Chennai between the first and second quarters of this calendar year, the latest residential price index (Residex) released by the National Housing Bank shows.
The growth ranges from 0.75% to 9.4%. The lowest rise in prices was recorded in Mylapore, Adyar, Velachery and Thiruvanmiyur and the highest in Virugambakkam, Anna Nagar, Kilpauk and Nungambakkam.
On a year-on-year basis, the increase in apartment prices ranges between 10% and 43%. Ayanavaram and Purasawalkam registered a 10% increase in April-June 2014, compared to the corresponding period last year and Mylapore, Adyar, Velachery and Thiruvanmiyur recorded a 43% increase.
The indices also show a slide in prices in the five micro markets of Egmore, Chetpet, Ashok Nagar, T Nagar and Saligramam, where the cost of apartments dipped by 1.4% to 7.7% between the first and second quarters this year. On a year-on-year basis, Egmore and Chetpet registered a 13% drop in prices, during which time Ashok Nagar, T Nagar and Saligramam recorded an appreciation of 24%, showing that the cost of apartments increased in these three locations for some time but fell in April-June 2014.
Realty consultant K Sathyanarayanan said there had been a correction in prices in Egmore, primarily due to a leading builder launching a mega apartment project on Montieth Road with pricing lower than other developers in the locality.
“This kind of correction is seen wherever builders purchase large parcels of land at a reasonable price and develop them,” he said “The price is also linked to the specifications provided by builders. In a difficult market, it makes sense to scale down specifications and sell at low rates.”
NHB residex covers 26 cities in the country and many micro markets in each of them. It looks at apartment price fluctuations by taking 2007 (100 basis points) as the base year. The indices do not provide any indication of the volume of transactions in these cities. Leading builders in the city say volume of sales has fallen drastically over the past year.
Many developers, having acquired land at a high cost, have not marked down prices. Chennai builders purchased properties worth 3,000 crore for projects over the past two years. Barely 10% of these projects have been launched, partly because delays in obtaining approvals and partly because of a fall in demand.
Source: The Times of India, Chennai