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.
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| 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.
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