Ajit Kumar Chordia, the new President of Credai Chennai, talks to Vaishna Roy after taking up office
Where’s the real estate market headed in the near future?
We saw this in 2008-09, when there was a lull but the market rebounded on the heels of a financial stimulus that was given. I strongly expect that once a new government is in place, it will propel sales. The money is there, but buyers are waiting for the elections to be over. Once a stable government comes in, sales will rise.
Were developers wise to add so many projects when there is so much unsold inventory in the Chennai market?
Actually, the inventory is not so high. The city has about 19-20 months’ stock, which is not too bad. Inside the city, housing is actually not available; you have to go to the suburbs to get good flats. On OMR, sales have been low because the infrastructure is still bad, but despite this the rentals on OMR are still very high, around Rs 4,000 per sq. ft in places.
Can Credai work with the government to solve some of these infrastructure issues?
Right now, we do not have any interaction with the government but down the road, we would definitely like to initiate talks, along with media organisations. We need more flyovers — thoroughfares such as Jawaharlal Nehru Road, Outer Ring Road, GST Road, Poonamallee High Road, ECR are choked with traffic. There is no train service. The monorail must be extended to the city’s peripheries.
Fresh water and public transport are the two biggest problems in the city today. They are killing development. The government should set in place a regulatory mechanism that allows private townships and apartment blocks to make their own water, set up their own independent desalination plants because the costing will be as economical as getting it from a government plant and definitely less than buying from tankers. We need experts to look into these issues.
Why is real estate so expensive in Chennai, compared to prices even in a highly developed city like Bangalore next door?
The availability of land is very restricted in the city. Most of the land holdings here have been in the hands of families for several generations, who have inherited it down the years. They are usually not open to selling it. The sentiment attached to land is high. Also, the economic development has been high in manufacturing, automotives, engineering and other old economy industries rather than IT and software, which is leading the growth in Bangalore leading to much higher demand for housing there.
How are Chennai developers handling the shortage of raw material such as sand etc?
Yes, sand availability is a serious challenge. Blue metal could also become a problem shortly. We are all looking at alternatives, but right now the problem is that these alternatives are in danger of being misused at the ground level — where the mix is made and the proportions decided. This is not safe for construction. As Credai President, I am making it one of my goals to work on best practices and to explore technology to come up with solutions that are cost-effective, and which can reduce construction timelines, prices and manpower usage.