Chennai is one of the most stable and least volatile residential real estate markets in India. However, since over a year, home buyers have been more cautious and are prolonging their decision to acquire homes, citing reasons such as high home loan interest rates and unattractive property prices. It is pertinent to note that this conservative market is primarily driven by end users, and that price sensitivity is an important factor.
Reduced interest rates
With the recent interest rates reduced to 9.90 per cent and a gradual rationalisation of home prices, there has been a renewed interest in the home buying segment. Further momentum is likely in the event of the RBI announcing further reduction in the lending rates. With regard to property pricing, however, there appears to be no further scope of reduction, as prices across segments seem to have bottomed out.
Infrastructure
Infrastructure development has also been helping the Chennai property market. The first phase of the Chennai Metro Rail Network from Koyambedu to Alandur is to be operational shortly, and this is stimulating buyer interest along the 10-km stretch in the residential areas of Anna Nagar (West), Koyambedu, Vadapalani, Ashok Nagar and Ekaduthangal.
The State government plans to complete the four-lane section on the East Coast Road (ECR) between Akkarai and Mamallapuram by March 2016. With encroachments removed on the left of the road heading to Mamallapuram, the Tamil Nadu Road Development Corporation (TNRDC) has started road construction on this stretch. The reduced travel time along this stretch will attract buyers looking for beach homes, villas and high rise apartments along the scenic coast.
Social infrastructure along the IT Corridor on the OMR is expanding rapidly, with one shopping mall already operational and two more under construction. Likewise, the availability of cinemas, hotels, restaurants, educational institutions, and hospitals along the stretch from Perungudi to Siruseri is stepping up interest among investors. Prices in this corridor range between Rs. 6,500 and Rs. 9,500 per sq.ft. in the pre toll sector from Taramani to Perungudi, and between Rs. 8,000 and Rs. 4,000 per sq.ft. in the post-toll sector from Thoraipakkam to Siruseri.
The 12-km stretch from Madhya Kailash to Sholinganallur is gradually being developed as an extension to South Chennai, offering housing of various configurations with attractive amenities and options ranging from townships to lifestyle apartments and villas at attractive prices compared to Adyar and Thiruvanmiyur. Properties along the 200-foot radial road from Thoraipakkam to Pallavaram are also becoming attractive because of their proximity to OMR and GST Road.
An interesting trend in the recent past is the arrival of premium and luxury apartment projects in central areas of Chennai such as Nungambakkam, Egmore, Alwarpet, T. Nagar, Kotturpuram and Adyar. Buyer interest in this segment is increasing rapidly.
The writer is Head – Residential Services (Chennai) JLL India
