Surge in demand for developed plots in Chennai

Chennai

The growth corridors of Chennai and the resultant infrastructure development have pushed the land prices to a new high. As a result, there is a spurt in demand for developed plots in peripheral and suburban areas. Investors prefer developed plots in the medium to long-term so that it will serve as a hedge against inflation.

Due to surge in demand, land prices in plotted development projects are up by 12% in the last one year alone in specific areas like Singaperumal Koil, Sunguvarchathiram-Wallajahabad road, Sriperumbudur and Trivellore. With the improvement in connectivity levels and proximity to both rail and bus transport, there has been a sudden spurt in the number of plotted development projects mushrooming in peripheral and suburban areas. While some are sold as plots others are keen to undertake housing development especially when it is developed on a larger land area.

According to land developers, those looking for a 5-year horizon investment period should invest in areas within 50 km radius of the city and those looking at a minimum investment period of 7-10 years can opt for 100 km radius. It is only then substantial return on investment can be derived as connectivity levels and infrastructure development take time and play key roles in deriving the maximum yield for investors.

An estimated 10 private limited companies are developing land development projects with a range of amenities like landscaping, clubhouse and 24×7 maintenance services. There are several unorganised players in the market.

Plot loans are available from a few institutions but at a higher lending rate and the quantum of loan are restricted to the guideline value of the property which is less than the market value. This increases the upfront margin money for investors seeking plot loans. A majority of the housing finance institutions insist on construction within the prescribed period and so investors may not be able to benefit much out of plot loans if the intention is to just make medium to long-term gain.

There are ground realities for investors before plunging into plotted development projects. Among the basic documents that need to be verified include title deeds, revenue documents like Patta, chitta and adangal, encumbrance certificate for a minimum period of 30 years, sanctioned planning permission from DTCP, authentic document to establish the identify the vendor, etc.

Source: http://content.magicbricks.com/surge-in-demand-for-developed-plots-in-chennai