The Real Estate Scenario of Chennai in 2012 & 2013

Real Estate in Chennai is a very striking phenomenon. While the Central Business District has always enjoyed distinction of being the most preferred and the most invested in, there are other more silent counterparts in the city that have been growing steadily and today reigning supreme. The peripheral regions of Chennai have been witnessing immense residential and commercial growth in the last two decades. Large plots of agricultural lands have been usurped to make way for thriving Real Estate activities, since the demand for Real Estate in the city has been skyrocketing. Chennai’s Real Estate market has been largely end-user driven and hence economic slowdown has not affected the city’s realty prospects as much as it’s done with other metropolitan cities.

2012 through 2013 – Chennai’s Real Estate market

In 2012, the demand of Real Estate in Chennai observed significant movements in terms of buyer interest and large volumes of land and property transactions. 2012, therefore saw a big wave of property development and realty project launches in the peripheral and suburban regions of Chennai. Buyers and builders in Chennai engaged in large volumes of land transactions in regions like GST Road, Medavakkam, Perumbakkam, OMR and Sriperumbudur as the regions were poised for dramatic potential.

In 2013, markets began to slow down; While other metropolitan cities faced a slump in Real Estate demand, Chennai continued to do well undeterred by market drivers. But in the third quarter of 2013, the falling of rupee, market uncertainty and turbulent economic conditions made the sales velocity to drop its pace. However, Chennai picked up by the end of the fourth quarter of 2013. There was a sudden spurt of interest in the Real Estate market of Chennai especially from the NRI segment. Builders in Chennai introduced schemes and newer projects considering the dynamics of the market and buyer interest then. But 2014 is expected to take the path of its predecessor and cater to the demands of prospective buyers.

Source: ET Now

Chennai has always been considered as a favorable destination for Real Estate investment in South India. It has consistently attracted investors with the best of educational, infrastructural, healthcare and quality of life. However, Real Estate in Chennai assumed newer and larger proportions with the entry of multinational giants in IT/ITES, manufacturing, chemical and automobiles. This advent accelerated career prospects immensely thereby increasing the percentage of migrants to the city. This increase in residents of Chennai creates residential demand in the form of property purchases and rental options.

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Why 2014 presents to be a Lucrative market for Real Estate in Chennai?

2014 has begun with a positive outlook for Real Estate in Chennai. After the turbulent times faced in 2013, prospective customers have created futuristic demand for Real Estate properties in the city. There are a number of factors that support the growth and demand of realty in Chennai this year. These factors are going to be responsible for enabling prospective buyers make certain and good investment decisions in 2014. Apartments for sale in Chennai have been the highest-in-demand trend when realty in the city picked up. The trend is most likely to continue in 2014 with considerable increase in demand for independent homes and villa houses as well.

Reasons contributing to favorable Realty demand in 2014  

IT/ITES Growth

Real Estate in Chennai has for a long time been influenced by the growth of technology companies in the city. 2014 is going to be no exception to the rule. In 2013, there was a massive absorption of 4 million sq ft of commercial office space in Chennai. This indicates further employment opportunities, increased population and higher demand for housing and development. Chennai’s IT population by itself stands at 4.5 lacs. This is a big number and is only expected to increase going forward.

No impact of Higher input costs 

Construction and labor costs contribute to one of the biggest costs for the builders in Chennai. Although, they have been increased by 10 to 15 percent, it is not reflected in the price of apartments for sale in Chennai; Thanks to the Real Estate builders in Chennai. Also, land parcels in Chennai are dwindling owing to increase in land prices. However, these have not begun to translate in property prices. Hence, 2014 is a favorable time for Realty investment since prices are most likely to increase in the future.

Infrastructural development

The infrastructural scenario in the city has impacted the Real estate business. There are a number of development projects that escalate the commercial growth of the city. There is a lot of focus on the growth of Outer Ring Road that has seen the completion of Phase I and progressing to Phase II. Moreover, the Chennai Metro project is another most-awaited infrastructural development task in the city. Further, there are new schools, malls and hospitals that are sprouting in the city time and again.

Transportation

The apartments for sale in Chennai along with other kinds of properties are poised to witness tremendous growth since the government has enabled faster, easier and better public transportation facilities in the city. 

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Real Estate Momentum moves from CBD to Peripheral regions in Chennai

Chennai is not just all about Egmore, Adyar, Nungambakkam, T.Nagar and Mount Road; It is about regions like Medavakkam, Perumbakkam, Poonamallee, Sriperumbudur, Oragadam, OMR, GST Road...etc. Although the latter has developed much after the places mentioned in the first list (comprising the Central Business District), they have seen tremendous changes and growth in a very short span of time. While Real Estate properties in the Central Business District (CBD) are undoubtedly the most preferred, there is another big segment of buyers showing great interest on apartments for sale in Medavakkam, Perumbakkam...etc in the peripheral regions of Chennai. Apartments in Medavakkam, in particular, are selling like hot cakes and there are reasons for their soaring popularity. Here are some striking features of evolution in Real Estate in Chennai.

The CBD has turned exorbitantly expensive with premium builders declaring launch of projects worth several crores. This segment is today accessible only by the most affluent. However, the peripheral regions and suburban markets serve as a breather to the middle and upper middle class segment of the city’s population with affordable apartments for sale in Chennai. OMR and ECR set the trend of shifting popularity from CBD to the more remote localities. The other regions were quick to take cue and follow suit.

The major industrial players began to set their establishments along this region since the CBD could no longer provide large spaces for commercial centers and large multinational companies. This further accelerated the growth of suburban markets by which Medavakkam gained immense popularity and the demand of apartments in Medavakkam picked up pace and the area suddenly became popular.

Apartments for sale in Medavakkam are the most sought after residential Real Estate properties because the region is in close proximity to the airport, other significant regions of Chennai like OMR, industrial corridor and is also well equipped for major infrastructural development.

Most pockets became coveted landmarks of heavy Real estate demand. Perumbakkam is another destination located closer to Medavakkam and not too far away from Tambaram and GST Road. As Chennai expands, these locations have become hotspots of investment on Real Estate in Chennai. 

The peripheral regions are today affordable when compared to the CBD and hence offer scope for better returns on your investment. The scope and opportunity of development is almost saturating in the CBD but there is a lot more potential left in the suburban markets. Hence, Medavakkam, Perumbakkam, Sriperumbudur, Oragadam and every single region along OMR and ECR are up for grabs. 

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Basics of Buying Flats in Chennai

One of the most popular sayings goes by the lines, “There is no place like Home”. Real Estate in Chennai is on a rapid growth mode with the advent of IT companies and parks establishing their presence in the community. If you are ready to buy your new dream home, then there are certain things you need to be wary of the apartments for sale in Chennai.

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How Mall culture has influenced the Real Estate scenario in Chennai?

If you think that Mall culture is new to the Chennai city, then you might be wrong. The city may perhaps be one of the oldest to have brought in the mall culture with Spencer Plaza in Mount Road. But the world never stopped experimenting and contemporary malls do not just represent convenience and comfort but also affluence and luxury. Today, Chennai is inundated by malls of all kinds in every prominent part of the city. As the population moves to peripheral regions, the need for development of malls in those regions also increases tremendously. Perumbakkam, one such kind of region, is a Real Estate investor’s paradise. Flats for sale in Perumbakkam are on a high as they are close to a number of malls, serving as recreation destinations, thereby influencing the modern lifestyle of the urban population.

Entry of Major Multinational Retail Players in Chennai

Although Chennai is seeing an inflow of several modern and beautifully architected malls; a number of multinational retailers are making their way into the city and these developments are proposed in the second half of 2014. The investment scenario in 2013 may not have been so conducive to the entry of these major players but 2014 demonstrates to be a more open stage for them to make their advent. A fresh supply of retail space can be seen in different pockets of Chennai that includes suburbs such as Perumbakkam. In a day and age where weekends are dominated by visits to a mall, the retail spaces are caching in on the presence of residential communities in and around their premises. Hence, most malls are located in residential localities that show great potential of development.

Mall Culture and Real Estate

As mall culture occupies a significant position in the lives of city people, both the CBD and suburban markets have fair share of malls and retail spaces where people can shop, buy, eat and enjoy. Today, flats for sale in Perumbakkam have even accelerated in their momentum mainly because being enhanced by the construction of shopping malls in and around the region. Malls like The Laurel Mall and Gold Souk Grande Mall in GST Road, MARG Junction and Coramandel Plaza Mall in OMR are some of the retail spaces that are located in and near Perumbakkam. Chennai by itself has seen a deluge of malls in the last 5 years and their development has been massive. The growth of malls is indicative of the kind of development a city is witnessing or expected to go through.

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Builders in Chennai

How Real Estate market in Chennai observes Stability despite Economic slowdown in India?

Flats for sale in Chennai witness a stable demand trend even when economic slowdown has affected most industries across the world. One of the most important reasons for this is that South India’s major metropolis is largely an end-user driven market. Other metros like NCR and Mumbai demonstrates major price upheaval throughout the city but Chennai observes such price increase only within certain pockets. This means that there continues to exist many regions that are still accessible by the middle class community price-wise. Apartments for sale in Chennai have differential price tags depending upon their locations and hence a large cross-section of buyers can make these properties their home even today.

Here are some quick and obvious reasons that keep the Real Estate demand and growth in Chennai relatively stable regardless of the economic conditions in the country or outside.

Chennai Property Market Tops Mumbai, Delhi-NCR

Courtesy: Bloomberg TV India 

1. Lack of speculation

It has now become obvious that Chennai’s Real Estate market is influenced by end users. Investor participation here is long term and people prefer apartments for sale in Chennai largely for investment or residential purpose. Unlike other major metropolitan cities, Chennai does not witness immediate buying and selling of properties to realize quick money. Such Real Estate dealing trend cannot be seen in Chennai and hence the market is least speculative when compared to other metros.

2. Buyer preferences

The demand of apartments for sale in Chennai is backed by concrete preferences of people since they are used for the purpose of primary consumption. Real Estate investors are specific about what they want to buy, their requirements are concrete and long term. So, the market is not filled with flats and homes of low standards and quality. Anything and everything do not sell in Chennai and because of that prices are also more or less stable.

3. Chennai is expanding 

Although there is a strong preference towards the Central Business District when it comes to buying flats for sale in Chennai, people have begun to move towards greener and more open pastures in search of the right property. Therefore, the paradigm shift towards the city’s peripheral and suburban regions has opened up the market and resulted in steady prices.

4. Increase in township projects

Chennai over the years may have seen considerably fewer township projects but this is expected to be a new trend since many builders in Chennai are today focusing on the creation of integrated townships over and above the regular flats for sale in Chennai. 

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Builders in Chennai