The realty market of Chennai, in 2018, failed to exhibit any significant signs of improvement and remained subdued even in the last quarter of the year. Bogged by the prolonged slowdown in the country, the quarter witnessed minimal new launches and resurgence of the market remained a far cry. Below mentioned is a list of some of the factors that can possibly revive the real estate market in Chennai.
Political uncertainty, building collapses and near catastrophic floods have caused great distress to real estate in Chennai over the past few years. Despite a large number of structural reforms, the market displayed meek sentiment, and the number of new launches remained truncated throughout the year 2018. The impasse in Chennai’s real estate landscape has now hit a two-year mark, and the struggles do not seem to end for the city. Here is an account of the major hurdles that the city faces towards its path to a realty revival and the factors that would help it tackle those.
- An answer to the paucity of sand: Unfettered mining on the river beds to meet the demand of the construction industry paved the way for ecological imbalance and the paucity of sand in Chennai. Increased demand from the construction industry and a dwindling supply of sand further threatened several residential and government projects all across the city. Keeping in mind the augmenting woes of the developers and to tide the acute shortage of sand, the government, later on, decided to import and market river sand, consequently providing a temporary sigh of relief to the construction sector. However, there is still a need to regularise river sand mining, curb the steep hike in sand prices and find viable alternatives to better address the concerns of the industry.
- Better flood management system: Low lying areas are usually the most affected during times when heavy rains lash the city. And therefore, even though a long time has passed since the ruinous floods of 2015, the fear of ground-floor housing units refuses to subside in Chennai. It has been found that residential units located on the ground floor dissuade the prospective homebuyers who fear being marooned in their clusters during devastating emergencies. Draining of wetlands and their conversion into housing units of catastrophic consequences has already marred the homebuying sentiment in the low lying areas. Chennai, being a lower elevation coastal city with a high population density, requires a better flood management system to deal with the situation effectively.
- Infrastructure Push: In order to ease traffic congestion up to a further extent and boost the development of suburbs, there is still a need for better infrastructure in Chennai. Multiple concerns regarding poor infrastructure in the city have been raised by the IT/ITeS companies, which have made matters worse, not only for the daily commuters but also for people looking out to invest in residential properties near the companies. Added infrastructural push including adequate water supply, better sewage system, and improved transportation network will not only enhance the influx of visitors but will also speed up the growth quotient in the city suburbs.
- Transparent and efficient registration process: As per the requirements of the Real Estate (Regulation and Development) Act, 2016, every project must be registered under the respective State’s RERA before being marketed by the developer. As compared to other States, project registration in Tamil Nadu is a long and cumbersome process, which requires a lot many compliances to be fulfilled. Delayed approvals and poor execution of RERA have contributed to the delay in real estate projects all across the city. So far, only 778 projects have been registered under Tamil Nadu RERA. A transparent and efficient registration process is, therefore, the need of the hour.
“The approval and registration mechanism in Chennai is one of the major drawbacks for the city’s realty. A lot many compliances need to be fulfilled for registration under RERA, which unfortunately is a complex process in Chennai. There is a dire need to make this process more efficient and transparent. Other than this, increase in FSI for residential buildings will also help to boost realty in the city”, says G Balaji, Vice President Sales, 99acres, Chennai
Since affordable housing has garnered maximum traction from the homebuyers in Chennai, there is a need to focus more on this segment which is not only a viable but also a practical option to give a thrust to the city’s suburbs. For new projects to be launched in the affordable housing segment, intervention from the State government is definitely called for. These initiatives collectively will help to spur realty growth in Chennai in the times to come.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.