While areas in the western suburbs of Chennai in Tiruvallur district are seeing development, growth in some localities along the Chennai-Gummidipoondi section is restricted to a few km from the railway stations.
Banners announcing sale of plots lead people as one walks outside the Minjur and Ponneri railway stations. While connectivity is the driving force behind the growth of realty in an area, developers are yet to explore the potential in many of the western and northern suburbs.
According to M.K. Sundaram, Managing Director, Chozha Foundations, and secretary of Construction Industry Development Council, a lot of layouts have come up on these areas close to the station. However, major developers are, perhaps, hesitant as they have limited scope to go for large projects.
“Rail line is the most essential factor to attract a developer. While it does have rail network, the connecting roads should be wide enough, which is not the case in these suburbs,” says Mr. Sundaram.
Among other reasons, he says, areas such as Red Hills and Athipedu are at a low level.
So laying the foundation would be expensive in these pockets that are dominated by middle class homes. Most of them are employees of many manufacturing units.
Households with a family income of less than Rs.20,000 a month, with the offices of the working members on this stretch, are mainly investing in these localities.
More than seven years ago, S. Jeevarathinam, an employee in Ennore Foundries, shifted from a rented accommodation in Ponneri to Minjur.
The Foundries was encouraging people to invest in the locality. “We paid Rs. 20,000 for our 1,600 sq. ft. plot in Shetty Nagar, which is one km from the station. It takes me less than 15 minutes by train to reach office and my son's school is in Panchetti,” says the resident.
Saline water, poor roads and erratic bus service are a few problems residents complain about, but plot prices have increased.
“At present, one sq. ft. is priced at Rs. 600,” he says. The Jeevarathinams have also given the ground floor portion of their two-bedroom house for rent, which fetches them Rs. 3,000 a month.
According to real estate brokers, T.E. Ravi and A. Kumar, land transactions have increased over the past few years and the demand is predominantly for plots close to the station. While one cent of land sells at Rs. 2 lakh in Gummidipoondi as it is an industrial area, in Ponneri town the price is Rs.6 lakh, they say.
Metro Rail's plans to extend to Tiruvottiyur, Chennai Port to Maduravoyal Expressway and Metro Phase II extension to Moolakadai are a few indications that the western and northern suburbs would soon be explored.
Western suburbs of Ambattur and Avadi are seeing faster growth with more industries, proximity to city and better transport connectivity.
Affordability is another factor realtors will have to keep in mind. IVR Asset Holding Limited is selling 275 plots spread across 45 acres in Minjur.
“There were no takers for one year after we started selling plots, as we priced it above Rs.400 per sq. ft. when the market value was Rs.150. We later brought it down to Rs.300 per sq. ft. and more than 50 per cent of the plots are sold,” says S. Rajagopalan, manager, IVR Asset Holding Ltd.
“In another two years, a lot of developers would be focussing on these areas. A lot of SEZs are also coming up, but budget housing will have to be the key if projects have to get sold,” adds Mr. Sundaram.
These areas attract people for investment as of now.