When the rest of the country was lagging behind in the performance chart, Chennai has witnessed a price growth.
There are two economic drivers pushing the performance barometer of Chennai the business sector and the IT/ITeS and manufacturing companies. The advent of commercial hubs and software manufacturing companies in the outskirts and within the city limits have added a pulse to the city’s realty.
Peripheral markets include Old Mahabalipuram (OMR) and Eastern Coastal Road (ECR) and core areas cover localities, such as Anna Nagar. All these areas are in the radar of the migrating professionals from different cities and other parts of the state. Most of them are employed in organisations in the above mentioned industries. As a result, the rental and capital markets in these particular areas have been positively impacted.
The core areas have a different story to tell. New projects are limited here but what is driving the real estate are the redeveloped properties. The local market is flooded with new inventory of the same which is being received by favourable demand from potential buyers.
Commerce has flourished like never before. Trinita Roy, a consultant in the real estate sector confirms the line of thought. Roy says, “IT and BFSI leasing of office space has significantly contributed to the residential demand. Hiring activity is rampant in these companies which has propitiously affected the investment demand both rental and capital.”
Western Chennai localities such as Ambattur, pre-toll areas along the OMR and some localities beyond the OMR have been advantageously impacted. Property prices in these parts are not very high and with the new residential stock coming up, buyers and tenants have ample options to choose from. Beyond OMR, several localities have many under-construction projects in different stages of completion.
An important factor that influences buyers’ location preference is that it should not be a low lying area. History has taught buyers to be smarter about the location to avoid situations when disaster hits in the form of floods. Arun Kumar, founder and MD, Casa Grande Pvt. Ltd. Says, “Increase in transactions took place because during the floods conversions were almost nil. The pentup demand translated into transactions in the first quarter of the year.”
The state government has exposed the defective pockets through survey and effective mapping. It is now taking steps to set up an effective drainage system. However, it will be wrong to imply that only the government will have to work the way out. The developer community will need to take onus of the localities where their project are placed. A thorough study will bring into light the problem areas which need to be fixed.
Kumar shares, “Clients want furnished completed homes as they do not want to undertake the hassles of delivery timelines. Buyers usually opt for projects of developers who have a clean background without any major delay in project deliveries.” The sale of RM properties is not dependent upon specific localities. Whether they are placed in the heart of the city or in the fringes, it does not make a big difference. Buyers will look at the developer and the amenities being offered along with it.
Chennai has had a good run. Whether the coming months will prove to be better or at par with its past performance, will be something that we need to watch out for.
Source – Namrata Ekka, Times Property, Magicbricks Bureau/ Chennai