Chennai: City realtors couldn’t have asked for more. Despite concerns about high interest rates, rising input costs and delayed approval process, the residential segment in the city witnessed nothing short of a boom in 2012. Be it budget homes, gated communities, premium apartments, luxury villas or super-luxury houses, Chennai consumers got a lot of choices to explore this year.
Though the real estate scene across the country was bleak, Chennai market sustained its momentum driven by end-user demand and conservative approach by investors. “The year 2012 was an amazing year for TN developers,” said T. Chitty Babu, national secretary of the Confederation of Real Estate Association of India (Credai). “Driven by job opportunities created by the state, especially Chennai, through various government initiatives, there was a steady flow of outsiders coming in, creating the need for residential spaces,” he added.
Tamil Nadu has been creating over 1 lakh jobs for the last three years in succession through various government initiatives in infrastructure development. Interestingly, this was not limited to the IT sector which was seriously hit by recession. “IT jobs are only about 30-40 per cent; it was other sectors such as auto, ancillaries, telecom, textile, etc., that kept up the flow,” said Babu. Redrawing Chennai corporation’s limit to include more suburbs in the ambit of Greater Chennai proved boon for developers promoting projects along the peripheral areas.
OMR, Sholiganallur, Oragadam, Porur, Perambur, Sriperumbudur, etc., got a new lease of life with land being mopped by realtors for bigger projects. Shooting rentals pushed for personal purchases that kept the market vibrant so much so that Chennai recorded the maximum price increase in property rates during the year at 16 per cent. But this was only in central business districts, clarified Nandakumar, member of Credai, Chennai. “Though the market did well against all odds, these oddities resulted in increase in input costs, shortage of labour and resources like sand, brick and cement,” he said. Input costs shot up by 12-18 per cent during the year, he added.
Revision in guideline values and stamp duty registration charges during the year may have swelled the government's kitty but have eroded profits, complain developers. “Though project launches kept happening throughout the year, such price hikes had an impact on the number of actual registrations," said Mu.K. Selvaraj, secretary of Builder's Association of India, Chennai.
Despite all odds, with Chennai being perceived as a safer place to live, a steady demand for residential spaces kept the market momentum, said Babu.
For the original post visit: http://www.deccanchronicle.com/121224/news-current-affairs/article/chennai-real-estate-market-shows-upswing