C Shivakumar
Siva Krishnan, head of residential services (Chennai) Jones Lang LaSalle India told Express on Friday that the outlook for Chennai’s residential real estate market this year is quite rosy and the increased job security in the sector has helped the real estate market to maintain buoyancy and a positive outlook.
“Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues,” he said.
“We expect overall demand for residential properties in Chennai to increase once the interest rates stabilizes from their current peak,” said Krishnan in his report.
He says FAIRPRO 2012 will give a lot of fillip to the real estate market in Chennai as there is lot of clarity as well as lot of benefits for the developer.
During the last six months, the real estate sector was hit as approvals were not happening and this was also highlighted by CREDAI’s president T Chitty Babu recently. However, during the last two months things have improved and Babu feels that FAIRPRO will ride on the stability of IT and ITES sector. “We had been receiving lot of queries during the last quarter from the IT sector and this is due to stability in the sector,” says Chitty Babu, who is hopeful the timing of the expo just before budget will give ample time for customers to think and plan their budget.
Interestingly, the preferred size for three BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. “The main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT/ ITES sector,” says Krishnan.
There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. “Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure,” says Krishnan.
Expected Price Movement For 2012:
OMR - 15-30 per cent
GST - 10-15 per cent
City – 20 per cent
NH-4 - 5-8 per cent
Source: Jones Lang La Salle
AREAS TO WATCH
Madhya Kailash – Sholinagnallur:
This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years.
Velachery:
Velachery is seeing consistent growth, because it is one of the few areas that are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram–Thoriapakkam, the 200 Feet MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.
Source: Jones Lang La Salle
Chennai:
The stability in information technology (IT) and information
technology enabled services (ITES) and the dip in inflation is expected to spur
the demand for residential properties in Chennai, according to Jones Lang
LaSalle India.
Siva Krishnan, head of residential services (Chennai) Jones Lang LaSalle India told Express on Friday that the outlook for Chennai’s residential real estate market this year is quite rosy and the increased job security in the sector has helped the real estate market to maintain buoyancy and a positive outlook.
“Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues,” he said.
“We expect overall demand for residential properties in Chennai to increase once the interest rates stabilizes from their current peak,” said Krishnan in his report.
He says FAIRPRO 2012 will give a lot of fillip to the real estate market in Chennai as there is lot of clarity as well as lot of benefits for the developer.
During the last six months, the real estate sector was hit as approvals were not happening and this was also highlighted by CREDAI’s president T Chitty Babu recently. However, during the last two months things have improved and Babu feels that FAIRPRO will ride on the stability of IT and ITES sector. “We had been receiving lot of queries during the last quarter from the IT sector and this is due to stability in the sector,” says Chitty Babu, who is hopeful the timing of the expo just before budget will give ample time for customers to think and plan their budget.
Interestingly, the preferred size for three BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. “The main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT/ ITES sector,” says Krishnan.
There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. “Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure,” says Krishnan.
Expected Price Movement For 2012:
OMR - 15-30 per cent
GST - 10-15 per cent
City – 20 per cent
NH-4 - 5-8 per cent
Source: Jones Lang La Salle
AREAS TO WATCH
Madhya Kailash – Sholinagnallur:
This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years.
Velachery:
Velachery is seeing consistent growth, because it is one of the few areas that are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram–Thoriapakkam, the 200 Feet MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.
Source: Jones Lang La Salle
Chennai’s commercial property is fast developing and the real estate developers in Chennai are developing IT parks and shopping malls which are best amongst other commercial properties in Chennai when architectural beauty is concerned. This clearly indicates an explosive growth of Chennai’s real estate market.
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