More than half of Chennai’s population lives in rented houses: Census

Chennai

More than half the city’s population lives in rented houses. With fewer independent houses and cost of apartments becoming prohibitively high, a majority of the people have not been able to buy their own homes, a fact reflected by the final census data on Tamil Nadu that was released in the city on Tuesday.

The census figures showed that only 47.2% of Chennaiites stay in houses they own. The report, which covers 11.06 lakh households in Chennai district enumerated in the census exercise in May and June last year, shows that there has been a tiny 0.1% rise in the number of people in Chennai who own their homes. In the 2001 census, 47.1% of people in the city stayed in houses they owned.

“Anybody who does not pay a rent to stay in a place is considered to own the accommodation,” said C Chandramouli, registrar-general and census commissioner. The census does not differentiate between squatters and legitimate property owners.

The figures are indicative of a huge rental market in the city that caters to more than 50% of the population that comprises non-permanent residents. Many Chennaiites own more than one apartment in the city.

Additional houses are rented out to migrant employees who have moved into the city in recent years. Many of them are in the IT and manufacturing sectors. In the past year, the state created one lakh additional jobs, of which Chennai garnered the largest share. Many of these jobs were taken by people below 30 who did not own houses.

There has nonetheless been a significant growth in purchase of apartments by migrants, said T Chitty Babu, secretary, Confederation of Real Estate Developers’ Association of India.

“Few people from outside the city purchased apartments in Chennai till 2005,” he said. “But a recent study by the association revealed that almost 40% of new home buyers are affluent migrants, most of whom are youngsters employed in the IT and manufacturing sectors, up from 10% to 15% four years ago. This trend is visible across Chennai.”

The relatively low cost of land in neighbouring Kancheepuram and Tiruvallur districts has drawn home buyers to those areas. In Kancheepuram, 70.5% of households are occupied by owners and 67.8% of the Tiruvallur population lives in their own homes.

In rural areas like Ariyalur (91.4%) and Dharmapuri (90.5%) the percentage of owner-occupied houses is even higher.

Source: The Times of India, Chennai

Ground realities before investing in real estate

Chennai

A number of investors have sunk their money in real estate ranging from vacant plots to apartments and commercial properties. This is because of the confidence that investment in real estate yields lucrative return on investment. There are certain ground realities which investors are supposed to adhere to prior to plunging into investment but for those who have failed to do so, it has turned into a nightmarish experience.

Ranjan (name changed), an NRI from Kuala Lumpur, had invested in land on the outskirts of Chennai and when visited the plot during his holiday, he found that the land had been acquired by the state government. When he approached the land developer, he confirmed the move and convinced him to provide alternate plot. But the land provided in a far away place where even access was quite frustrating. He has not even passed on the compensation received from the government to the investor.

Kumar (name changed) is working in Sharjah for the past fifteen years. A land developer from Chennai had sold plots near Hosur during the boom days. But, he could not locate the plot in spite of commitment to arrange for site inspection during his holidays. A group of NRIs hailing from Sharjah who have been take for a ride by the same land developer has voiced concerns to the Indian consulate in Dubai but no concrete action has so far been taken in this regard, say market sources. The land developer has closed his Dubai operations and none of the investors could get their grievances redressed in spite of knocking at the doors of the company’s operation in Chennai.

In yet another instance, a land developer had sold the land on the coastal area to an NRI in USA which was never registered and subsequently the land had been acquired by the government.

It is not confined to NRIs alone but even resident investors are left in the lurch. Take the instance of Sahara township project due to come up near Savitha Dental college on the outskirts of Chennai which has not taken off the ground.

Even the new development near the IT Corridor has been shelved to put investors in the lurch. Take the case of IndiaBulls which has launched phase 3 project in Perumbakkam. Investors are now compelled to take the refund amount failing which it would be credited to their bank account leaving little time for investors to decide on the option. In a written communique to those who have booked apartments a year ago, the company has simply mentioned that they could not get the approval from the government authorities due to land title issues. It is not clear how they can accept the advance from the investors without obtaining the approval from the authorities or without the due diligence exercise. The company officials could not be reached for comments.

These are isolated instances but they reveal the extent of ignorance on the part of investors to follow ground rules before plunging into realty investment. A leading property lawyer in the city cautions investors to visit the site not once but at least three times on different dates to make detailed enquiries about the ownership in the neighbourhood. In one case, a shrewd buyer came to know that a part of the site was used as burial ground which fact was hidden while marketing the property to investors.

The Chennai Metropolitan Development Authority (CMDA) has an investor cell wherein one can get details about the approval accorded for sites free of cost. Investors should invariably engage the services of a professional lawyer before opting for investment. Plot loans are available which is yet another way to minimise the liability of the investors as the in-house legal team in the lending institutions would scrutinise the title deeds before sanctioning plot loans.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/ground-realities-before-investing-in-real-estate

Developers focus on mixed development projects

Chennai

Most large residential projects in the suburbs of the city are focussing on mixed development, with apartments and villas catering to multiple economic segments housed in the same project.

It is seen as a step towards inclusive living and a part of the evolution of integrated townships. Breaking the tried-and-tested concept of constructing apartment blocks, developers, these days, are experimenting with mixed development, wherever possible.

These projects are typically spread across large tracts of land that run to more than 25 acres and they contain apartments of varying sizes (1, 2 and 3 BHKs), villas, bungalow apartments, duplex houses, all in the same project. Says S Ramakrishnan, CEO, Marg Properties, “Such projects are possible only when large tracts of land are available and they can, naturally, be planned only in the suburbs and outskirts of the city. Optimisation of land costs is an important factor here. So from the developer’s perspective, it makes financial sense to only venture into such development in large planned townships.”

Marg Swarnabhoomi, spread across 1,000 acres on ECR, is a case in point. The residential wing of the project has a variety of housing options across economic and lifestyle categories – a mix of high rise apartments, affordable homes, smart homes, to name a few. This model is gaining popularity and developers believe that this approach makes social and economic sense, in the case of large projects. As Kalyan Jayaprakash, Director – Acquisitions, Inno Group and Director, Inno Geo City, explains, “In large-format developments, it is important to cater to multiple segments and create something for every aspiring home buyer. It fosters inclusive living; if you cater to only one segment, you will be creating ghettos.” The group drew inspiration for the project from similar successful models in Europe.

Inno Geo City, spread across 130 acres in Oragadam, has row houses, bungalow apartments, villas, 2 and 3 BHKs, with a host of amenities. He adds, “The idea is to create small sustainable cities that are self-contained and hence, environmentally-friendly. Well-planned townships such as these must ensure that all economic groups from rural and urban sections are accommodated.”

Such projects also offer better saleability as it caters to multiple economic segments, says Suresh Krishn, MD, Isha Homes. However, most of these projects are in various stages of planning and construction; so there is no completely functional model in and around Chennai, as of now. Suresh is of the opinion that though this is a good concept, managing such properties will pose challenges. “Each type of development – villas, apartments, etc – requires a completely different set of amenities, including security systems. Planning and maintaining such projects is going to be a challenge and since the city doesn’t have a working model yet, we’ll have to wait and see how this pans out,” he adds.

Developers like the Mumbai-based Mahindra Group have believed in catering to various segments in their projects. When they started work on the ambitious Mahindra World City project in Paranur, the company was sure that they wanted to build a city that was not only best in class, but which will also cater to different segments of society, says Sangeeta Prasad, Chief Operating Officer. “When we planned Mahindra World City, we realised that we have to take into account the different demographics and psychographics of the people who will live there. We believe in an inclusive philosophy where projects will cater to all segments,” Sangeeta says. “Our Aqua Lily project, is for example, a mix of villas and apartments. “There definitely is trend towards such developments; however, it may not be feasible all the time because it could result in a mish-mash. When people look at buying a house they usually prefer an environment that matches their sensibilities,” she says.

R Kumar, Managing Director, Navin Housing & Properties (P) Ltd, views it is a welcome trend and feels that more developers should focus on catering to different segments of society. “It is a builder’s responsibility to provide a well functional, eco-friendly complex that will cater to people from different categories in society. The trend is here, but this can be implemented only in large projects like mini townships that have huge tracts of land at the developer’s disposal,” he says.

“For the developer, it makes a lot of sense as it will be allow him to utilise FSI to the maximum as a mixed segment will include villas, roughhouses and apartments. Our company is quite keen to work on a project like. But our first attempt failed due to the restrictive approval policies of the CMDA (Chennai Metropolitan Development Authority).” “The best examples of mixed development can be seen in Mumbai suburbs like Andheri where several developers have taken up such projects. They are the need of the hour in Chennai too, but the CMDA here has several restrictive policies that deter developers from taking up such projects. If the CMDA officials could be convinced about its benefits, we could soon see more of such developments in future,” he says.

Source: Harini Sriram and Sangeetha Nambiar, Times Property, Times of India, Chennai