New Trends In Chennai Residential Real
Chennai is known for its conservative mind-set, which reflects visibly on its
residential property market trends, as well. For instance, home buyers in
Chennai have historically been driven by location over and above most other
considerations, and this had put definite limits on the demand and potential for
community living in the city.
There has, so far, been no scope for the growth of large-sized township projects
within the city. Chennaites had been showing an unyielding preference towards
living within the CBD because of the dearth of good schools, convenience stores,
entertainment and restaurants in other areas. Developers had been more than
happy to construct projects of 12-30 units with limited or no amenities, little or no
green cover and extremely restricted open spaces.
In the coming months, Real Estate market in Chennai will see a major change in
this aspect, with a string of township projects by developers of national stature
under execution and nearing completion. These township projects have minimal
plot coverage, which paves the way for large green cover and ‘lung space' within
the project. This is an added incentive to opt for community living, which was
largely unheard-of until as late as 2006.
The new game changers in the Chennai residential real estate space are
generous landscaping, serene environment, schools within the campus, big club
houses, health club facilities for both indoor and outdoor sports, multiplexes in
the vicinity, health care, restaurants and large swimming pools.
As a result, community living in the true sense is finally going to emerge in
Chennai. We anticipate that once these large projects are fully executed, we will
see a decisive forward momentum in the concept of large, well-equipped
residential communities in Chennai.
General Scenario - Supply & Demand
Chennai's residential market is witnessing considerable demand in the affordable
segment - specifically for units in the price range of Rs. 35-60 lakh - in locations
which offer an acceptable degree of social infrastructure. Overall, Chennai's
approximate absorption of residential units is between 28000-30000 per annum,
with most of the absorption taking place in the OMR and near the IT corridor
with luxury and comfort life in Chennai
It is still a predominantly end user-driven market, with 60-65% of the buyers
being people purchasing for self-use. Residential space investors in Chennai tend
to take a long term view, the modus operandi being to look at off-loading their
holdings within an average time-span of 5-7 years. This attribute further
strengthens the market's end-user behaviour.
Chennai is a stable market wherein residential property prices move in
accordance with actual sales. Price volatility due to other factors has been
completely excluded. As a result, prices have note dropped at all in most projects
over the last few years.
Also, residential property
in Chennai is driven more
by locations than by
specifications and amenities.
The scarcity of land parcels
and also the cost of
premium FSI within the
city have create relentless
upward pressure on
residential product pricing.
This has resulted in the
available options in these locations shooting way past the budgets of even the
upper middle class. Prices for standard apartments with minimum or no
amenities within Chennai city can range from Rs. 1.5-5 crore.
Residential developer who want to keep the cost of units in their projects
affordable need to look at suburban locations with limited infrastructure. The
only other option available to such developers is to cut the unit sizes so that they
can include some degree of decent infrastructure. Lack of locations with good
infrastructure has hindered the supply of land, which has resulted in pricing
going upwards whereas the pricing remains stable or stagnant in locations which
lack good social infrastructure.
The need of the hour in Chennai's residential real estate market is a good
supply of land so that new locations can be opened up and the requisite social
infrastructure and other utilities can be put in place. If this happens, we will see
more innovation in residential products, because developers will need to set
themselves apart with uniqueness and differentiation in their products.
Akshaya was founded in 1995 under the stewardship of Mr. T. Chitty Babu, a leading
light of the real estate industry in India. It has grown into one of the most awarded
companies in the country acclaimed for its transparent business practices and
innovation. The journey over the last 19 years has seen the company excel in both the
home and commercial domains by building more than 150 magnificent edifices in
Akshaya Services Private Limited
No. 22, 2nd Street, Nehru Nagar,
Adyar, Chennai - 600 020.
Tel: 044 - 2445 1818