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Sep 20, 2013, 03.48 PM IST | Source: Jones Lang LaSalle

New trends in Chennai residential real estate

Chennai is known for its conservative mind-set, which reflects visibly on its residential property market trends, as well.

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.

New Trends

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, 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.

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.

Pricing

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.

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Property rates
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Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
Note: Price trend are based on asking rate and not necessarily on the transaction date
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