The Chennai residential market has witnessed a capital appreciation of 150 per cent over the last three years (from 2009 to 2012), which is a steady and cumulative growth devoid of any major spikes or troughs that are characteristic to the residential landscape in any city or market. This can be attributed primarily to the features, which are peculiar to the Chennai residential market, according to an industry expert.
The Chennai residential market has various advantages working in favour of its growth, including the support from both the manufacturing and the services industry, continuous infrastructure programmes across the metropolitan city supported by the state government without a favourable bias to any particular locality and a relatively stable government, which provides comfortable situation to people across various sections.
Transactions in Chennai are dominated by end customers rather than by speculative investors and at a macro-economic level, bringing down the interest rates and helping end customers to continue to look at buying properties, according to N Hariharan, office director (Chennai) with real estate consulting firm Cushman & Wakefield.
Besides, the city real estate has seen higher interest from the non-resident Indian (NRI) and high networth individual (HNI) customers considering that property prices have been stable or only corrected positively.
"The outlook for the city's residential real estate market is expected to show further progress and sustained growth in the next one to two years. With plans ahead to expand the metropolitan area and the newer infrastructure facilities promised by the government, and the pace at which the existing facilities are getting completed, growth is imminent," he said.
Speaking about the specific corridors attracting residential real estate investments, the expert said that the Old Mahabalipuram Road and East Coast Road continued to attract customers owing to the sustained IT industry development and the fairly decent rental returns from these micro-markets. These two markets continue to create interest in developers and more launches are expected to come up in the region. The prices would appreciate at around seven per cent year-on-year, he added.
The GST Road and Bangalore highway, which are expected to be the next preferred destinations for customers, are preferred by mid-market customers looking for smaller size of units and the ticket size lie within the range of Rs 60 lakh. Oragadam, a hub of manufacturing facilities, has also gained prominence lately for residential development due to its strategic location.
Hariharan said that the newer corridors, including the Poonamallee High Road and the micro-market of Manapakkam - Porur - Maduravoil - Ambattur, had gained momentum of late and appreciation in these markets had been a minimum of 75 per cent from 2008 to 2012, and was poised to go up due to their proximity to the industrial corridor.