Chennai city housing prices zoom past Rs 1 crore

Chennai

If you are an apartment owner in a good location in city areas, then you can feel proud that you are a crorepati today at least in notional values. But if you are the one due to invest in housing for a specific city location, you will have to cough up not less than Rs 1 crore. Soaring land values, lack of clear title properties, fierce competition among developers and demand exceeding supply have all made buying an apartment a virtually impossible task for the common man.

Yet another factor is the archaic development control rules which have throttled the housing development for decades in key locations across the city. Restrictions on FSI have made housing a costly exercise for Chennaiites over the years without rhyme or reason. The worst affected sector is the middle class for whom the question of acquiring their dream home in city areas will be a Herculean task hereafter. The Tamil Nadu Housing Board apartment owners in key city locations are sitting pretty as the redevelopment exercise on their existing units would fetch a windfall besides cash incentives in the years ahead.

Just visualise the apartment prices for select ongoing projects across city locations and for a 1200 sqft apartment the price is over Rs 1.25 crore: Alwarpet (Rs17,500-Rs20,000), Anna Nagar (East) (Rs 12,000-Rs12,500), Besant Nagar (Rs 12,500-Rs 13,750), Adyar (Rs 13,500), Kalakshetra colony (Rs 15,000), Kilpauk (Rs 12,800-Rs15,000), MRC Nagar (Rs 10,500-Rs15,000), Kasturi Ranga Iyenger road (Rs 28,000), Nungambakkam (Rs 13,000 – Rs15,000), R.A. Puram (Rs 13,500), Sri Nagar Colony (Rs 14,000-Rs16,000), T Nagar (Rs 12,700-Rs15,000) and Valmiki Nagar (Rs 11,000-Rs12,000).

Even the resale apartments in key city locations are quoted at rigid prices due to which the transactions are taking much longer time nowadays, say realtors monitoring secondary market price movements in the city.

At the same time not all city properties can fetch fancy prices. There are road restrictions and access issues that have made even prime properties lying idle for several years as buyers do not evince keen interest at such prices. Even property developers are shying away from joint development in such areas due to lesser ratio for development. Some developers are keen to even accept 55:45 (developer) as the sale value compensates them with higher revenue and the lead time is short besides there is a ready market for such units.

For the younger generation this is a timely lesson to start investing in homes much earlier than later. They can pursue their costly higher education without any institutional commitment while pursuing their initial careers. They can mortgage, rent and raise resources from housing finance companies and banks to pursue their academic interest without the need to depend on their parents.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/chennai-city-housing-prices-zoom-past-rs-1-crore

TNHB gearing up for redevelopment

Chennai

The redevelopment exercise that gained momentum ever since the city land prices soared is now entering a new phase. The Tamil Nadu Housing Board itself will develop the 15 projects across the city in areas like Mandaveli, CIT Nagar in Nandanam, Anna Nagar and a few other areas. Bids have been invited to build the housing projects on PPP model which is riveting the attention of the state government to tie up with private sector for housing development.

In a related development, those who own lands bought earlier through TNHB allotment, are also keen to tie-up with the board for joint venture development. An announcement in this regard drew encouraging response from the plot owners, according to official sources.

This is apart from the private sector development across the city where developers have tied up with TNHB apartment owners’ association at strategic locations. As the board has spent for infrastructure earlier, they are now charging for enhanced area development by way of premium FSI to issue no-objection certificate.

A similar exercise would be carried out in Coimbatore in areas like Kaundampalayam, Uppilipalayam and Singanallur where housing board colonies including rental housing schemes are in place. An estimated 200 unit would be developed on PPP model.

Though no development is proposed in Madurai as of now, a study is being initiated to ascertain the condition of the building, age, present construction scenario and current development control norms to explore utilising the additional FSI.

On the flip side, it is not a cake walk for the TNHB despite a major initiative to boost the redevelopment exercise across the state. An estimated 40 per cent of the apartment owners in city areas are reluctant to move out of their existing premises having lived for 30-40 years. The efforts to convince them on the long-term gain of living a larger area and new construction did not yield the desired results so far, say officials.

The TNHB still holds land areas and some of them are embroiled in litigation and there are even pockets of land for which there is no direct access and negotiation has to be done with the private land owners for development.

During the years 1996-2006, the TNHB was lying low due to accumulation of unsold stocks and since then the board has cleared 75 per cent of the stocks in the categories of apartments, houses and plots.

The government had announced earlier of a satellite township in Thirumazhisai at a cost of Rs 2,160 crore on 311.05 acres on land owned by the TNHB. Over 12,000 units will be built and made available to the EWS and LIG and MIG. The project has reached a crucial phase now in land acquisition, say official sources. An estimated 12 acre land involving the access road from the NH4 to the site is in the process of acquisition.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/tnhb-gearing-up-for-redevelopment

Chennai residential property prices rise three fold in four years

Chennai

Prices of residential properties in the city have been skyrocketing ever since National Housing Bank (NHB) started preparing residex — an index for tracking the prices of residential properties — in 2007, but for one quarter, when the prices declined. Residex shows that Chennai’s residential property prices have shot up by threefold in four years. Areas like Ashok Nagar, Anna Nagar and T Nagar have boosted the price increase.

“Chennai opened up its suburb markets in a big way after 2007, while other markets were much matured by that time. That’s one of the reasons for this steep increase. Chennai grew slowly and steadily from thereon. While Bangalore, Delhi and Mumbai prices shot up suddenly and fell rapidly during recession,” a senior real estate consultant in the city said.

Residential prices in 14 other cities that residex tracks have seen more than one declining quarter, and Chennai has seen the fastest increase in the fouryear period. The closest competitor to Chennai during the period was Faridabad, where the prices just about doubled.

The prices at Virugambakkam, Anna Nagar, Kilpauk, Purusawalkam, Kolathur and Nungambakkam have shot up by six times. While, prices at hot spots like Ashok Nagar, Thyagaraya Nagar and Saligramam jumped five times, during the five-year period.

On the flip side, the growth rate has been comparatively at a slow pace (twofold rise) at Tondiarpet, Nehru Nagar, Chetpet, Egmore and Marina. The demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% until 2015, estimates say. Industry observers say the prices will head north at least for a quarter or too. But, after that it will stabilize and grow marginally.

For the January-March period, residential prices in the city grew 40% yearover-year, according to NHB Residex. This is the steepest increase among the 15 cities tracked by NHB. In the little over four-year period Chennai has seen a steady growth, and has proven to be a matured and safe market, say analysts.

“Within the city or suburbs the land parcels are slowly disappearing so the demand picture is clear and the prices are bound to shoot up. The OMR stretch has prices increasing steadily. Apart from Sri Perumbadur every area in the city will see an increase in prices. I feel the prices will rise at the current pace in the near-term and long-term in the city due to high demand,” said A Shankar, senior manager, Jones Lang LaSalle.

Source: The Times of India, Chennai

Growing demand for expatriate housing in Chennai

Chennai

With the influx of global auto majors and the expansion of IT majors in Chennai, the number of expatriates looking for housing is up over the years. The city is now home to an estimated 7,000 expatriates mostly from the European countries.

In Chennai, expatriate housing demand invariably revolves around coastal area for independent units. Gated community development and row houses are also in demand. While South Chennai is the preferred location, demand exists for Anna Nagar from Japanese expatriates who are working in North Chennai.

Among the criteria for selection of housing in particular for expatriates moving with family, specific mention must be made about the presence of an international school, access to key centres, ambience for a comfortable social lifestyle, etc. In terms of housing, they are specific about 3 BHK units with a range of amenities like guest room, study room, party area, balcony, swimming pool, garden area, power back up and 24×7 water supply.

A number of such facilities are mostly available on the coastal area which is one reason for the surge in demand for housing from expatriates in the vicinity.

Rentals range from Rs 1 lakh to Rs 1.25 lakh per month for luxury apartments and independent units built to international standards on the coastal area overlooking the sea vary from Rs 3 lakh to Rs 4 lakh per month. Of course there are properties available in the price range of Rs 1 lakh – Rs 4 lakh.

According to Anita Krishnaswamy, President, Global Adjustments Services Pvt Ltd., the demand for expatriate housing will fluctuate depending on the schooling time in the city. During the months of January and August, demand is high as new people will be joining and school reopens for the new academic year.

Apart from villas, demand for serviced apartments is gaining momentum now as short-term assignments ranging from 4 to 8 weeks upto three months drive expatriates to the city. In which case expatriates do not prefer to take an independent house but instead wish to stay in serviced apartments. Most of the relocation agencies operating in the city are able to provide pre-travel services to gear up the expatriates for a comfortable living in the city.

Most of the lease arrangements are through corporates and renewable every year. Landlords prefer company leases to individual ones in the city.

On the flip side there are cultural and communication barriers. For many, going through multiple stakeholders to resolve minor issues irks them as they are exposed to single agency in other countries. This is where relocation agencies play a key role in providing training on how to handle varied groups while living in India.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/growing-demand-for-expatriate-housing-in-chennai

Resale property prices in Chennai reach a new high

Chennai

With Chennai’s residential property prices consistently moving north, location specific homebuyers are keen to settle for resale units available in city areas. Proximity to educational institutions, hospitals and retail facilities convince them to opt for resale properties.

Moreover, those looking at investing in larger units in city areas are also keen to dispose of their existing city units and opt for new units through bridge finance. All these compelling factors have virtually pushed the prices for resale apartments to a new high.

The price mismatch between old and new units is narrowing down to just 20-25 per cent now due to surge in demand for resale units, according to industry sources. Here again the demand varies depending on the specific location and property developers have a long waiting list from location specific customers for booking new units as and when new projects are launched at city locations.

For instance, in Kodambakkam while the new units are quoted anywhere between Rs 9,000 and Rs 10,000 per sqft, a resale unit deals took place place at Rs 6,500 per sqft, say realtors. Similar is the case in Nungambakkam at Rs 8,000 per sqft and Nolumbur at Rs 4,000 per sqft.

The demand for resale units particularly for middle class budget segment has been strong and growing, feels H Balasubramanian, Managing Director of Bhoomi Realty. The apartments coming up for resale are mostly located in gated community developments and in proximity to a range of facilities which makes life a little bit easier for Chennaites to avoid commuting long distances, he adds.

The demand for resale units is particularly strong in city areas like T Nagar, Nungambakkam, Chrompet, Nanganallur, Velachery, Nolumbur, Anna Nagar, Adyar and Besant Nagar apart from suburban locations like Sholinganallur on the IT corridor. There is a growing demand for other areas as well but the demand hinges on competitive pricing.

Even housing board flats with larger UDS are in big demand in areas like Besant Nagar and Kotturpuram as city land prices are soaring, says Murali, a realtor with Estate Points. With the redevelopment trend gaining momentum people are keen to invest in resale units now, he adds.

According to realtors, the trend is likely to continue until infrastructure development improves in suburban and peripheral areas with the emergence of more educational, health and retail amenities and connectivity levels.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/resale-property-prices-in-chennai-reach-a-new-high

Redevelopment in Chennai poised for next major leap

Chennai

Strategic location advantages, vast open area, eligibility for higher FSI and an ever ready developer community to convert the existing site into a modern day multi-story apartment complex have all made erstwhile Tamil Nadu Housing Board occupants to wonder how best they can make better use of their crumbling units in prime city areas in Chennai. There are at least 10 medium to large-scale developers who have undertaken the task of redevelopment assignment in main areas in the city. An estimated 1,000 such projects may undergo transformation spinning a huge opportunity for both developers and occupants.

The momentum has already started and the coming years will see Chennai’s vibrant city areas like K K Nagar, Anna Nagar, Thiruvanmiyur, Besant Nagar, Korattur and Mogappair replacing housing board units with private multistoried buildings with better amenities, higher FSI, and a chance for the owners to earn monetary incentives as well in some cases. There are areas where the frontage is substantial ranging from 500 to 700 ft.

Among the city’s developers who have undertaken the development include Ramaniyam, KGS, Pushkar Properties, India Builders, Landmark, Green Peace Foundations and a few others.

Enhanced FSI from 1.5 to 2.1, opportunity to use premium FSI, possibilities of mixed development, leverage to get additional amenities like covered car park, lift, gym, club house and children’s play area are the cascading affects of redevelopment for housing board flat owners. Industry experts say that it is a win-win situation for both the developers and those owning the housing board units to realise their lifetime of living in large sized units with better amenities and that too within the city areas. Moreover, increased rental prospects will be a big boon to those in the retirement ages for whom the main income would be from the housing units.

All said and done, it will be a time consuming process as housing board projects vary in sizes and the association members will have to marshall the efforts of those who may not agree to the terms and conditions prescribed by the developers. Yet, many developers have already made in-roads in this area for whom a big redevelopment opportunity is awaiting to be encashed in the coming years.

Source: http://content.magicbricks.com/redevelopment-in-chennai-poised-for-next-major-leap

Property prices up by 30% in Chennai

From last several months residential property rates are going through the roof for several months, but according to the fresh reports at the end of the September was 30percent comparatively with the last year.

According to the NHB Residex, an RBI-supervised mechanism that tracks housing prices in approx 15 cities said that “Chennai central business district f\has witnessed of huge rise in prices due to the uptrend in housing demands.” Though in North Chennai there is fall in property prices in the following areas Tondiarpet, Perambur, Dr Radhakrishnan Nagar and Narayanappa Garden due to the slow progress in projects.

In spite of country is facing economic slowdown, rising interest rates and recession property rates in the region are going upward- Anna Nagar, Kilpauk, Nungambakkam, T Nagar and Adyar have been rising. In Nehru Nagar, Chepauk and Marina areas prices rise to 62% comparatively last June. As per the market experts, Chennai’s property will see the robust growth in the forthcoming quarters. However, property prices in the region have plunged to 9% in the 3rd Quarter comparatively to the quarter ended June.

Whereas several market watchers said that, the demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% during 2011-2015.

Source: http://www.accommodationtimes.com/real-estate-news/property-prices-up-by-30-in-chennai/

City turns costlier, house prices up by 30% since last September

CHENNAI: Residential property rates have been going through the roof for months but new data shows that the spike for the quarter ending September was 30% more than the same period last year.

Chennai's central business district saw the highest price increases due to surging demand, according to NHB Residex, an RBI-supervised mechanism that tracks housing prices in 15 cities. However, prices in North Chennai - Tondiarpet, Perambur, Dr Radhakrishnan Nagar and Narayanappa Garden - saw a fall due to slow infrastructure development.

Despite the economic slowdown, high interest rates and inflation, prices of houses in the city's hotspots -- Anna Nagar, Kilpauk, Nungambakkam, T Nagar and Adyar -- have been rising. Prices in areas close to Nehru Nagar, Chepauk and Marina rose 62% compared to the quarter ending this June. "Chennai's residential market is expected to see unabated growth during the next few quarters. Active demandwillbeconcentratedin locations closer to the city centre," a recent Cushman & Wakefield reportsaid.House pricesin Chennaihavejumped 9% in the third quarter compared to the quarter ended June.

Prices in Virugambakkam, Anna Nagar, Kilpauk and Nungambakkam have quadrupled since 2007, when the National Housing Bank (NHB) begun the Residex for Chennai. The demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% during 2011-2015.

Real estate consultants blame limited supply and huge demand for property for the surge in prices in the central business district. The city, awaiting the metro rail, monorail and extension of MRTS,willcontinuetosee demand for property near these infrastructure developments, and a surge in prices seems natural.

"In areas like Adyar, Anna Nagar, Boat Club and Nungambakkam demand is high because people want to buy property in places they have been living in for a long time. Another factor that boosts demand and reflects in pricing is the premium schools in those areas. Supply in these areas is low compared to the demand and so prices have shot up.

In Chennai, schools play a big role in residential demand and people are ready to pay premium pricesfor those areas," said S Ramaswamy, associate director, Recs Group, a real estate consultant.

Prices in Delhi have increased the most followed by Chennai and Mumbai, while Kolkata witnessed a decline over the previous quarter. Prices in tier-2 and tier-3 cities like Kochi, Lucknow, Ahmedabad, Surat and Bhopal saw a quarter-over-quarter decline.

Source : http://timesofindia.indiatimes.com/city/chennai/-City-turns-costlier-house-prices-up-by-30-since-last-September/articleshow/10851683.cms