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Chennai this year saw a huge surge in supply of ready to move in residential properties, especially in the high end and luxury segments. According to a recent report by Colliers, this surge can be attributed mainly because of the increased confidence amongst property developers backed by stable governments both at the centre and state and reforms in real estate policies.
policies.
How the market reacted??
Current situation has turned out to be a boon for tenants; their options of rental properties have multiplied many folds while nominal or no increase in pressure on their purse. Tenants are now able to move to larger premium apartments without shelling out more. On the contrary, this has turned out to be painful for owners as they have little room to find tenants for the rent owners expect from their properties. To add to their owes, they are going for cut in rents while paying maintenance costs from their pockets to attract tenants. This puts them under immense pressure if they are paying EMIs on the apartment purchases. As a consequence of this fence sitters might push their purchases considering the rental choices they have.
The situation provides ample opportunities to Property Management companies in Chennai as they offer professional help to owners a great deal in finding suitable tenants at the company’s expense. They also offer a variety of services including hassle free tenant on-boarding, periodic property inspection and maintenance, finance handling etc.
No stopping the developers!
Although the situation might seem a little derailed, but there is no stopping of established real estate developers in launching new projects targeted at mid-segment and affordable categories. Locations that are close to IT corridors are witnessing traction backed by high demand and infrastructure support within their close proximities. Porur, Poonamallee, Valasaravakkam, Siruseri, Guindy areas are under the radars of most property builders. Infrastructure gains, with impetus from growing financial activities can be pointed at for instilling confidence in both developers and buyers alike. Some of these developments include
- Chennai Monorail – With proposal of over 20-30 stations, this project to connect vital nodes across Chennai cutting on commuting time. Some of important nodes that will be covered include – Poonamallee, Porurn, Valasarawakkam, Vadapalani, Kathipara, Tambaram, Vandalur, Velachery and others.
- Chennai Metro Rail Phase I from Chennai airport to Little Mount – This will to a great extent perk up connectivity with the Central Business District ( CBD )
- Chennai – Bangalore Industrial corridor ( CBIC ) to spur developments in the vicinity of the corridor owing to boost in manufacturing and job sectors
- Admirable road connectivity along vital nodes such as Siruseri ,Perungudi, Sholinganallur along the Grand Southern Trunk road has helped and continues to do so in real estate development in the regions.
- With Outer Ring Road Phase II and Metro Rail Phase II expected to go operational later this year, Guindy-Alandur cluster is likely to witness an Industrial and Real estate buzz.
Conclusion
Even though piling up inventory has caused concerns for developers, timely course correction of moving marginally away from luxury segment and concentrating on mid-level segment certainly is a positive. Backed by infrastructure impetus, both commercial and residential real estate markets are expected recovery in the near future.
