Saturday, April 23, 2016

The Changing Trends in Chennai Real Estate

As Chennai’s realty market improves, the city concentrates on affordable properties. Read on to know why.

After a long stagnant period, the residential property market in Chennai is recovering. The expectations from the Union Budget, shaky market sentiments and fiscal sops had slowed the residential market in Chennai. Till the time the budget and fiscal measures were announced, the residential market remained in its pensive state. However, the market is now on its path of recovery, especially after the rate cuts were announced by the RBI.

real estate trends in chennai
Real Estate Trend in Chennai | Photo Credit: www.realtor.com
Much like other cities, buyers of flats in Chennai have turned to affordable properties in the price bracket of Rs 40 to 60 lakh. Apart from the budget flats in Chennai, villas have taken off in a big way. The most selling categories of villas are the Rs 1.5 crore and more. The labour and input costs and land prices have made cost of construction higher in the area. This has deterred several property developers from launching new properties. The high price of property has also kept many buyers away who are biding their time to see prices dip. In spite of developers offering gold coins, foreign trips and flexible payment plans, developers of Chennai properties have failed to lure many buyers.

Those entering the home buying market currently look for 2BHK flats in Chennai within Rs 40 to 60 lakh. The reduction in borrowing rates for home loans has acted as incentive for several buyers to enter the market. The current scenario, however, has badly affected those developers who wanted to launch larger units. Chennai is a traditional realty market where home buyers prefer larger configurations like independent row houses and villas. However, the high price of real estate has made buyers rethink their aspirations. Developers have had to downsize the unit areas for catering to the changing needs of markets. This has bettered the sales than what he had anticipated.  
Given the increasing demand for bungalows and villas in the affordable price bracket, several developers have targeted the segment. The far flung areas from the city have seen an increase in tenement projects. Most of the affordable properties in the city are priced from Rs 50 to 75 lakh. The response from home buyers has been encouraging for them.

The outskirts have also seen an increase in plotted development projects. Earlier, plot based developments were handled by local developers only. However, top tier developers have also entered the market sensing the rise in demand for plots. The number of developers who have entered the market for plotted development is high because of liquidity crunch. They raise the working capital required to fund other high cost luxury projects. Despite an ulterior motive, the involvement of big builders in the market has generated positive impact on it as more people are looking forward to investing in plotted developments. Property management services and improved amenities are offered in these projects by leading developers.

The demand for low income group flats and flats for the economically weaker section shall continue for someone and middle sized developers are looking forward to undertake more projects in the sphere. The flexible lending norms for those employed in mom and pop enterprises have led to a rise in demand for such properties.
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