TNRERA takes steps to upsurge transparency
The Tamil Nadu RERA (TNRERA) mandated developers with projects outside the ambit of RERA to mention the same in their advertisements. The measure was taken to improve transparency in the functioning of the real estate sector since several developers were found advertising projects without RERA registration number and website address.
Sand paucity woes disrupt construction activities
The State government has been mulling import of river sand to meet the requirements of the construction industry. However, after rejecting sand from Assam, the State finalised an overseas contractor to import five lakh tons of river sand every month. The added cost is anticipated to shoot property prices up in the State.
State puts Tenancy Act on hold
Awaiting the Centre’s modified Act, Tamil Nadu government has put its ambitious Tenancy Act on hold. The implementation of this Act was anticipated to bring a paradigm change in the rental market by counter-balancing the rights of landlords and tenants.
Metro connectivity expands up till Central Railway
After a delay of two years, two metro lines – Central to Shenoy Nagar and AG-DMS to Little Mount via Saidapet – opened for public in May 2018, significantly reducing the travel time to the Central railway station. Airport connectivity, too, bolstered with the commencement of these metro routes.
Railway line in North Chennai nears completion
The fourth railway line between Korukkupet and Thiruvottriyur is nearing completion and is anticipated to reduce the travel time of express and suburban trains between Chennai and Gummidipundi. This 5 km-long stretch is a part of the 4th lane between Chennai Beach and Athipattu, one of the busiest routes of the Southern Railways.
Chennai’s residential property industry was in tatters in 2017 after the investors abandoned the market post a series of events impacting the political, geographical and regulatory framework of the city. Several quarters later, despite a spate of policy reforms and structural changes, residential sales and new project launches remain meek. Unsold inventory stood at 42,500 units at the beginning of Apr-Jun 2018, with ready-to-move-in properties occupying a 20 percent share.
Property prices, however, have managed to maintain status quo, QoQ, beckoning the resiliency prevalent in the market. The rental graph, on the other hand, reported a hike of four percent, YoY.
The expansion of the metro corridor towards the central parts of the city improved the livability quotient and rendered positivity to the otherwise grim consumer sentiment. However, any significant impact of this development on property sales and enquiries is yet to be seen. The lull in the market is expected to spill over to the upcoming months of July and August, the inauspicious monsoon period called ‘Aadi’. Experts foresee an improvement in Chennai’s residential market only after August, especially when the festive season rains discounts and freebies.
The booming logistics sector and the massive fund flow in the IT sector hold the baton to a revival in Chennai’s residential market in the ensuing quarters. The sand crisis may, however, pose a hurdle to the growth of the sector.
Infrastructure overhaul seems to be the only growth catalyst in the city marred by slow-paced registrations under Tamil Nadu RERA (TNRERA), ambiguities pertaining to GST, coupled with other political rifts and sand crisis. Apr-Jun 2018 was the seventh consecutive quarter when Chennai’s real estate sector displayed stagnancy in average capital values. Stakeholders expect a revival in end-user demand and sales volume in the festive quarter of Oct-Dec 2018.
The average weighted property prices across Chennai witnessed zonal variations, with the city average remaining unchanged this quarter. While the IT-dominant micro-markets in the South garnered healthy response from buyers, the sellers in the northern landscapes despaired for enquiries. Locales such as Kovilambakkam, Velachery and Thoraipakkam in the South posted a quarterly price hike of two-four percent, each, owing to healthy demand from the corporate buyer base.
In addition to the southern IT region, the fast-establishing IT/ITeS hub of Porur in the West, too, attracted potential buyers. As a result, the popular locales in its vicinity such as Virugambakkam, Maduravoyal and Poonamallee saw prices appreciating to the tune of two to three percent, each, QoQ.
New launches remained at bay across zones and budget segments. Initiatives towards boosting the development of homes under Pradhan Mantri Awas Yojana (PMAY) failed to encourage developers to venture into new business, resulting in unchanged demand-supply dynamics in the affordable housing segment.
The look-out for affordable homes continued to drive buyers towards the South along the Grand Southern Trunk (GST) Road and Chennai-Trichy Highway. Localities along the former stretch such as Anakaputhur and Gerugambakkam, with average capital prices ranging between Rs 3,500 and Rs 4,200 per sq ft, witnessed marginal positive price movement in the quarter ending April 2018.
Chromepet and Tambaram along the Chennai-Trichy Highway found ground amongst potential buyers looking for homes priced around Rs 4,500-4,700 per sq ft. The future of housing pockets offering affordable inventory priced up to Rs 25 lakh seems promising since the supply of such properties in the city falls short of demand by a significant margin.
Amidst the prolonged lull in the capital landscape, the rental market benefitted. Rental values across the city witnessed an upsurge of four percent between Apr-Jun 2018 and the same quarter previous year. Areas connected by the metro and those close to the IT hubs garnered maximum interest from the tenant community. The emergence of the IT-driven southern regions such as Velachery, Sholinganallur, Perumbakkam and Perungudi on the top of the rental charts this quarter does not come as a surprise.
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.