During the third quarter of this year, builders in Chennai sold 4,665 dwelling units when compared to 2,317 during the same period in 2020. Siva Krishnan, Managing Director, Chennai & Coimbatore, Head Residential Services, JLL India attributes this vigorous comeback to affordable and mid-housing segments that are driving the demand for the residential market in India. "Home loan rates at an all-time low combined with special incentives by the government come as a boon to first-home buyers.”
Rajendra Joshi, CEO, Residential Business, Brigade Group shared, “During the pandemic the fence sitters realised that this is a time to own home and that too larger home and that realisation have led to resurgence in the market. IT and ITES sector has seen hiring & salary increases and they form the majority home buyers.”
Dr. R Kumar, Chairman & Managing Director, Navins added, “Property prices will start moving up due to increase in the prices of construction materials and labour cost, thereby raising the future production cost for developers. This makes the present times the best to buy property. Although the initial stages of the pandemic affected the real estate market adversely due to lockdown restrictions, uncertainty and change in buyer sentiment, sales increased significantly from July 2021 onwards and it is expected to continue.”
Sriram Iyer, President and CEO, TVS Emerald agreed, “Till now RBI has been taking an accommodative stance but to keep inflation in check the repo rates are bound to increase. However, given that India’s economic recovery is encouraging, the real estate growth will be sustainable irrespective of price increase and inflation because if GDP goes up the per capita income goes up and homebuyer’s affordability increases.”
Abhishek Mehta, Joint Managing Director, Urban Tree Infrastructure expressed, “The real estate growth will sustain in coming years and this time around it is going to be a far more calculated growth. The developers with deep financial pockets that have survived the storms of GST, RERA and Covid will be the dominant players. Location, ticket size, project quality and delivery timelines will be the determining factors for the success.”
PLOTTED TOWNSHIPS ON THE RISE
Integrated township concept has not been a major hit in Chennai as compared to many other cities as Chennai market is comparatively much smaller and it also involves lots of complexity like approvals and clearances. In fact Chennai is not even five percent of Bengaluru in townships project development.
However, Chennai developers are betting big on plotted projects. The reasons are not hard to find says Siva Krishnan. “Customers preference for own homes over apartments is prompting builders to pursue plotted developments. Such projects also have an advantage of lesser investment and faster sales. For buyers the appreciation potential too is much more,” he elaborated.
Abhishek Mehta giving example of his own projects said, “We launched three plotted projects in last six months and now less than 10 percent inventory is remaining. The main draw was the location near the city and therefore actual home buyers invested in these plots. With low home loan interest rates and the permissible 5 year timeline to build the house near the city is a win –win for buyers.”
Sriram Iyer added, “I think the urge to own a piece of land has driven the plotted development market. Also the need to customise the homes and build what they want within their budget and at their pace is leading to an interest in plotted development.”
Rajendra Joshi sharing that Brigade has been the last to join the bandwagon of plotted projects said, “The whole urge to own a piece of land and build one’s own home seems to be true. And many branded developers are now foraying in this segment.”
Dr. R Kumar sharing a different opinion said, “The plotted development are seeing interest from mostly those who want to park their investment or for second homes. The apartments are still much in demand especially near IT hubs of the city. As the clout of pandemic is decreasing there is a renewed demand seen for large apartments with lifestyle amenities with in the complex.”
Gated communities and independent villas are garnering buyers' interest especially in Puddupakkam, Vandalur and Tambaram areas. Industrial hubs of Oragadam, Sriperumbudur, Guindy and Ambattur are witnessing improved demand for residential properties.
Chennai real estate considered an affordable market is grappling with increasing land costs that is bound to make housing expensive.