CHENNAI: If you are looking for an apartment within Rs 25 lakh in Chennai, then this may not be the ideal time for house hunting.
According to a report, more housing units opened up in the high-end segments than in any other category in Chennai and its suburbs, and no new affordable housing project was launched or announced this year.
Takers for mid-segment units in Velachery, Porur and Mogappair shrunk by 55% to 2,274 units in the first half of 2016 compared to 5,068 units for the same period in 2015, said a report by Cushman & Wakefield. In total, 3,350 units were launched in the city with the maximum in the high-end segment which grew by 471% to 1,080 units from 189 units in 2016.
Overall, there was a 40% decline in the launch of residential units in the first half of the year compared to the same period last year, indicating that the slowdown that started by 2014-end still prevails.
Despite both state and central government initiatives in the affordable housing segment, the city’s soaring real estate value apparently is the main dampener.
“In Mumbai and Chennai, the real estate value of the smallest piece of land would ensure that no matter how small the dwelling is it would still be expensive. So owning a house within city limits becomes tough,” said president, Religare Housing Development Finance Corporation, Deepak Joshi.
Lack of infrastructure is another setback for affordable housing on the outskirts. “Outlying areas do not have drainage or sewerage system or drinking water,” said managing director of Sundaram BNP Paribas Home Finance Srinivas Acharya.
But spelling good news for buyers, real estate value has gone down in key locations like Nungambakkam (-3%), Anna Nagar (-5%) and East Coast Road (-6%). While Chennai’s middle class grows and more high-end units come up, the price correction will ensure that units coming up in these areas are sold fast. In the case of mid-end properties, however, capital values have gone up.
“The suburban south (Alandur, Ekkatuthangal, Adambakkam, Nanganallur, Medavakkam, Perumbakkam, Pallavaram) saw an annual growth of 18% with Velachery recording an increase of 11% in capital values,” said the report.
The Padi-Ambattur belt will witness growth in 2016, said the report, as it has emerged as an attractive location for IT offices owing to lower rentals as compared to other prominent locations. This location has witnessed more than 3,800 residential unit launches in the submarket since 2010 across affordable and mid-segments. Capital value for projects in the area range between Rs 4,000 and Rs 6,000 per sqft.
“About 4.4 million square feet of office space is operational here. Employment generation in the region, coupled with affordable pricing and saturation of prominent residential locations in the suburbs will lend impetus to residential real estate in Padi-Ambattur belt,” the report said.
Courtsey: Rachel Chitra | TNN | 26-Aug-2016