Market growth and infrastructure around south Chennai The only market that saw an increase in promotions and introductions in the real estate segment was South Chennai which happened in the first half of 2015. Almost 92 percent of the residential units which are under-construction in Chennai are seen to be concentrated in the south and west markets of the city of Chennai as per a recent survey conducted.
Nearly 92 per cent of the under-construction residential areas in Chennai are concentrated in the south and west micro markets of the city, revealed a recent survey. Due to poor demand and slow sales there had been minimal project launches during the years gone by. However, the first half (H1), January to June 2015, has seen significant increase in launches in South Chennai. There has been a substantial increase in project launches – from 26 per cent in the first half of 2014 to 65% in the first half of 2015. Experts say that the localities of Adyar, Velachery, Sholinganallur, ECR, Medavakkam and Perumbakkam are much sought after for residential and commercial realty and this increase is thereby validated. Being close to the IT corridor, with good social and physical infrastructure as well as civic amenities South Chennai is a popular destination for real estate developers, investors and buyers.
The Chennai market has been close to a point of recovery while considering the sales numbers and there have been several new launches for the first time in 5 years. Chennai still remains the best market among its Southern counterparts and the residential market is in a mode of consolidation. With the infrastructure development projects such as Metrorail leading to growth, there is bound to be greater investments in property in these areas.
The first half of 2015, saw South Chennai covering Kelambakkam, Guduvancherry, Sholinganallur, Chrompet and Perumbakkam having an increased market share while Pallavaram, Perumbakkam and Kelambakkam have witnessed the highest development with 5800 units being launched at the same time. Apart from this, there are areas on GST and OMR which are also witnessing growth at a great pace. With 60% of units supplied South Chennai has so far been in the top spot for infrastructure growth in the second quarter of H1 as well. The areas that are registering fast and quick realty growth while attracting buyers, including NRIs are Velachery, OMR, Tambaram and ECR. These are the properties that are cheap and are good for long term investments.
Infrastructure growth is a prime mover that ensures this extent of realty growth and with the completion of projects such as the four lane stretch of 33.5 Km. on the ECR between Akkarai and Mamallapuram by March 2016, there is bound to be greater development and growth. With the Phase II of the Outer Ring Road being constructed, which will link the suburbs, there will be greater demand along with capital values of the projects getting located in far-away suburbs. Apart from this we find that the social infrastructure around the IT corridor on OMR is also expanding at a great pace.
The south of Chennai is seen to witness growth in affordable residential homes in areas where there is seen a proximity to employment hubs and better social infrastructure. The infrastructural growth also continues to drive the south and west micro markets. The North Chennai areas which include Tondiarpet, Madhavaram , Kolathur and Perambur have seen very few launches during the same period and this is attributed to the lack of social infrastructure and poor city connectivity. In South Chennai we have seen that with redevelopment of bungalows into apartment complexes, the breaking down of the joint family structure among the affluent class, we see that residential projects are the drivers of the premium segment. In these locations in the south of Chennai, the strengthening of prices, in spite of the increase in supply, accentuates the higher residential attractiveness of these areas.
Studies conducted by global property consultants show South Chennai to see growth over the next six months which is owed to the vast network of employment hubs which have led to the improvement in social infrastructure and lowered prices in these areas. The prime reasons for growth seems to be the relatively affordable residential projects such as Metrorail which has led to tremendous growth in these sectors.
Overall reasons for market growth in these areas The project types vary depending on the location, USP, land value and connectivity. With the GST road being well connected to the rail network, the areas attract senior living, affordable and mid-segment projects. The estimates project that 30-40 per cent of buyers are from the IT sector, which is followed by NRIs (25 percent). With monthly disposable incomes ranging from Rs.50,000 to Rs.1,00,000 the affordable, mid and luxury housing is very popular and evenly distributed in the city. Investors in the South Chennai belt are indeed fortunate to have made these wise investments during the growth phase in Chennai.
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