What are current trends for real estate/property in Chennai city? As the economy is on the road to recovery, purchasers' sentiments are convalescing. Whopping supply of 10 million sq ft of land for the IT/SEZ clearly shows that demand for high-class inventory has increased. Occupier's sentiments which had turned sour are becoming sweetened, slowly and gradually. Notable thing is that demand for the commercial inventories is more inclined towards quality/high-end space.
In the residential sector, the city is witnessing good increase in number of investments. As a result, developers also have picked up the tab, & have started investing the money in premium localities of Chennai city. This has resulted in a big supply of residential stock. Demand for such inventories, in the city as a whole, has seen appreciation in current quarter. Since there is no lack of supply, current demand-supply ratio is balanced number.
On the contrary, in case one takes regions such as GST Road & OMR into consideration, real estate is witnessing state of oversupply. Demand being less in such areas, developers are sitting on a huge pile of unused stock. Demand in such regions has ebbed, making builders running from pillar to post to sell. In the rest of the city, although the property is on full boom.
Increase of around 40% in the capital values in some regions indicates that prices of properties in Chennai will be stagnant, in years to come. Demand for the residential 1 BHK, 2 BHK, 3 BHK, 4 BHK, 5 BHK & more flats in city is rising in hot areas such as R. A. Puram & Velachery. Nungambakkam, Anna Nagar & Adyar also are witnessing rising preference for the quality houses. Investment in such micro-markets will be wise deed, & can assist in bringing big returns.
Good connectivity, sufficient infrastructure, & availability of land for the new constructions are some factors which have boosted Chennai city's property market. Most real estate constructions in the Chennai's areas target towards upper & upper-middle segments. In the OMR & GST, in light of oversupply, prices are on the road to correction. But real estate in the remaining part of Chennai city shall continue seeing appreciation. Some micro-markets have witnessed escalation in current quarter. Overall scenario is on the positive side.
Upswing in service sector of Chennai city is impacting infrastructural facilities, quality of life & property market of the city. Growing IT/ITES sector is good news for Chennai's real estate market.
Property amount in Chennai city is reasonable as compared to Bangalore. Also, the city offers good infrastructural amenities & healthy business environment. Such factors are prompting IT firms, MNCs & other big corporate firms to select Chennai over the Bangalore city. International firms are keen on opening campuses, facilities, or branch offices in the city.
Such trigger in demand of commercial & retail property is reflected on residential part too. Professionals, who flock to the Chennai because of employment, search for affordable houses. Therefore, demand for individual homes, plots, guest houses, serviced apartments, paying guests, Independent house, Independent villa, Independent builder floor, Independent floor, Studio apartment, Residential land, Serviced apartment, Farm house and all these facilities hikes.
Property agents also have noticed trend. Broker source informs that price of the residential property in Chennai city has doubled in last 03 years. Regions such as Boat Club Road have seen a four-fold rise in the residential values in the last couple of years, says an authorised source.
Regions that are near to IT corridors have registered 100 to 150% growth in the residential property values like old Mahabalipuram, Adyar, Kotturpuram and Ambattur.
Real estate developers, have sensed phenomenal potential in the Chennai property. New projects are priced at 2,500 to 4,500 Rs per sq ft for apartment ranging from 1,200 to 1,500 square feet. To make the most of the situation, some developers have increased launch prices of upcoming projects. In some cases, price rise is 20 to 25%.
Chennai's residential property is poised for growth. Commercial & retail infrastructures are too being braced up to fulfill new demand.
Chennai property market is witnessing unparalleled growth in commercial sector. Property value graph is showing constant rise in commercial real estate values but it is calculated to cross threshold quite soon.
Chennai's city economic set-up & its infrastructure favour industrial and the service sector. Traditional segments such as shipping sector prefer Chennai city due to its geographical location. New firms or businesses, such as the Back office Processing Operations & Information Processing Centers, also prefer Chennai city to other neighboring cities such as Chennai's infrastructure favors these activities. In fact, demand for the commercial activities surpasses supply, even after number of commercial projects is not completed. IT firms are fuelling the demand for commercial space in Chennai city.
Premium developers & realty majors have launched new commercial & residential projects to fulfill the rising demand. Most new projects are on the Chennai's IT Corridor. Major areas such as Mount Road, Nungambakkam, Cathedral Road, Anna Salai & Dr Radhakrishnan Salai are seeing maximum hike in property rates. These regions are accessible & are therefore preferred by property builders.
Present commercial capital value of the Radhakrishnan Salai is 4,500 to 5,000 Rs per square feet. This is the most expensive commercial region in Chennai. Property booker from Chennai city informs that other big commercial areas such as Anna Salai & Cathedral Road have the capital value of 4,200 to 4,500 Rs/sq ft.
Commercial rental values are also high in such regions & are expected to hike in coming years. Rental values for 1,000 square feet space at the Radhakrishnan Salai are about 35,000 to 50,000 Rs per square feet. This is high as compared to the other areas in Chennai city. Chennai's commercial segment will grow further when the locations along the IT Corridor become operational.
It is good for the city's trade & commerce but will affect property prices sharply. Real estate brokers feel that best deal is to capitalize on the city's present commercial hubs. These regions are sure to swell in next 05 year, making sure good returns as rentals or as the capital.
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