Chennai residential micromarkets have been stable with moderate price appreciation of 8-10% in the past one year.
There is a shift in buyer focus from the usual OMR, ECR to the West and North of Chennai. Porur, Medavakkam, Perambur, Madhavaram, Pallikarnai, Kolathur are a few such developing markets. Owing to the success of Velachery in the past few years, its neighbouring markets namely Medavakkam and Pallikarnai are also seeing high real estate demand.
The localities along GST Road namely Pallavaram, Chrompet, Tambaram lie in close proximity to the city, airport and still have lower pricing. Localities beyond Vandalur till Chengalpettu are ideal for land investments. The proposed monorail will further improve the connectivity of GST Road with the other parts of the city.
Even though the property rates have escalated, there is hesitation seen amongst buyers due to slow pace of infrastructure development in developing areas especially the OMR belt. Infrastructure development would play a vital role in making localities in OMR and other suburban areas liveable. Poor access, lack of proper water and drainage system top the list of grievances among Chennai suburb residents. Kelambakkam, Sholinganallur and Padur, are investment destinations on OMR.
The East Coast Road (ECR) runs along the Bay of Bengal and is a popular weekend getaway destination for Chennaiites. Buyers prefer staying on ECR belt as it is close to the city and yet away from the hustle-bustle of the city. Congestion on adjacent OMR belt has shifted IT traffic on OMR during office hours.
The commercial establishments on GST Road didn’t pick pace due to the government’s focus on establishing OMR as the IT Hub. For the same reason the localities along GST Road didn’t see similar price appreciation and demand as residential properties on OMR belt did. But in the past two years, post their inclusion under city limits, these areas have seen heightened interest from both developers and buyers side owing to affordability, proximity to the airport along with good connectivity with the city and OMR.
Over the last two years, Porur has seen massive demand from residential property buyers. It was included in Chennai Municipality in 2011. With high demand along with project launches from reputed developers, the capital values in the area have gone up by over 30-40%.
Focus on improvement of public modes of transport has been one of the major highlights in Chennai. This is evident from the expansion of the existing highways, work on Chennai Metro and the Outer Ring Road. With infrastructure projects taking shape, the demand and capital values are expected to rise across all sectors.
Residential market in North Chennai constitutes a small percentage of 15% of the total under construction stock in Chennai. Having traditional set of buyers, North Chennai sees maximum demand from its existing set of residents – mainly industrial, port and public sector employees.
With improvement in connectivity and better infrastructure facilities in the future one can expect an increase in demand for residential properties in North Chennai.
Going forward, growth in Chennai would not solely be determined by the IT/ITES sector, but also by the transport corridors of the above mentioned infrastructure projects.
Chennai market is looking forward to the MRTS and BRTS projects to give the city a new face in 2014-15.
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