While apartments in central and south Chennai remain unaffordable for most middle income groups, those in west and north Chennai are becoming practical and favoured choices.
Of these two, north Chennai suffers from negative consumer sentiment, thanks to its surrounding industrial areas. . But developers insist that this perception is fast changing due to the growing social infrastructure, the proposed Ponneri smart city and the second phase of the metro rail project.
R. Kumar, managing director, Navin Housing, says that the upcoming developments make the time ripe for investment. “Even though the CMR and the Ponneri smart city might take long to complete, realty prices have already shot up. As is always the case, price rise happens even before the actual development. So, a further increase in price could end up making these areas beyond the reach of many.”
However, according to a recent report by real estate consultant Knight Frank, developers in north Chennai have launched projects ahead of time which has resulted in unsold inventory that would take about 35 months to clear.
Says Kanchana Krishnan, branch head-Chennai, Knight Frank India, “There are 4,000 units under construction in north Chennai creating a case of oversupply. This leaves about 14 quarters of unsold inventory . This is one of the reasons why there haven’t been many new launches in the past two years, keeping land and apartment prices fixed, compared to the south and west.”
Kolathur
Advantage: Proximity to inner ring road, easy commute to areas such as Anna Nagar
Disadvantage: Lack of civic amenities
Apart from being well connected to the city by road and MRTS, Kolathur is still developing as far as social infrastructure such as schools, hospitals and shopping centres is concerned. Kanchana Krishnan says, “In places like Kolathur and Madhavaram, the real estate market is yet to stabilise. The marginal increase in projects in these areas is a result of the lack of quality projects elsewhere in the micro market. Compared to west Chennai, the prices here haven’t increased steadily and it would take anywhere between two and five years for these places to offer lucrative returns to investors.” Meha Singla from real estate website Commonfloor.com insists there is a demand-supply balance here as a result of developers targeting the right customers. She says, “A twobedroom flat in the region does not exceed 900 sq ft and its price Rs. 5,300 per sq ft. Twenty-two per cent of all new bookings are for flats below Rs. 40 lakh.”
Perambur
Advantage: Already developed, close to central Chennai, access to rail network
Disadvantage: Considered slightly low-end, highly populated
The costliest among upcoming suburbs in north Chennai, Perambur boasts a higher standard of living compared to surrounding areas. With good social infrastructure in place, the suburb has seen a steady growth of schools, hospitals, shopping malls and multiplexes. The lack of civic issues compared to other localities in north Chennai means the area is home to a sizeable population of whitecollar workers.“People have started taking note of the obvious price advantages Perambur comes with. If one can purchase a flat here (12 to 15 km from the city) for half the price of a similar sized one in south Chennai (over 35 km from the city), why not it?” asks R. Kumar, managing director, Navin Housing.
He has announced a 224- unit apartment complex in Moolakadai close to Perambur, where flats are priced at Rs. 5,129 per sq ft. While the price of housing projects has floated around the Rs. 6,000 per sq ft mark for the past two years, developers say the completion of upcoming infrastructure projects will soon push up prices. “Several places in north Chennai hardly received any attention from either the government or the developers for a long time. But with the entry of certain key developers, Perambur has witnessed positive changes in infrastructure- both commercial and residential.
This has improved the standard of living and dispelled certain notions about the place being a lowincome suburb,” adds Kumar.
However, according to real estate portal indiaproperty.com, the prices in Perambur have fallen in the last nine months to Rs. 5,300 per sq ft from Rs. 6,000 per sq ft in October 2013.
Tondiarpet
Advantage: Affordable pricing, close to central Chennai
Disadvantage: Congestion, lack of availability of large tracts of land
Tondiarpet is known for its high population density and the resultant congestion. In the absence of large vacant land parcels, developers are finding it difficult to promote larger projects that can improve the standard of living in the area. “Tondiarpet is a low to middle income market and the customers’ needs are different from that of those in other parts. They’re looking for smaller flats at lower prices. So the developer has to first get his spacing right. A two-bedroom apartment, 800 to 900 sq ft, within the Rs. 4,000 per sq ft mark will work for customers here,” says Devesh Bhuva, general manager, Sales and Marketing, Prince Foundations. “There were no proper roads in this area even two years ago but all that is changing now. Roads have become better and it takes me only about 40 minutes to reach Nungambakkam now. Compared to south Chennai, the cost of living is lower and amenities like water supply are consistent. Apollo Hospital on T.H Road is accessible and good schools and shopping centres are coming up,” says T. Shekar, a businessman and resident of Tondiarpet.
