Government orders demolition notices against illegal structures
In an attempt to restore the water bodies and prevent floods in the city, the government has decided to raze illegal structures obstructing flow of natural storm water. All flood-prone areas would be covered under this new ruling.
Redevelopment on the cards for Chennai’s localities
The Chennai Metropolitan Development Authority (CMDA) is set to prepare a detailed project report (DPR) for the redevelopment of areas such as George Town, Triplicane and Purasawalkam. The authority aims to improve living conditions by having wider roads and more open spaces through the renovation drive.
Centre approves new road and highway projects in Tamil Nadu
Chennai is set to benefit from the sanctioning of Rs 40,000 crore for road and highway projects including Tambaram-Chengelpattu, Poonamalee-Maduravoyal and the Tiruvallur corridor. Moreover, upgradation of Tambaram-Vandalur and VandalurGuduvanchery stretch of the highway to eight lanes will ease congestion on the busy Tambaram-Perungalathur bridge.
Chennai gears up for an infrastructure makeover under Smart City mission
The city prepares itself for an overhaul under the Smart City mission with key connectivity projects including Metro rail phase 1 extension, phase 2, and an upcoming Bus Rapid Transit System (BRTS). Besides, the forthcoming pedestrian plaza in T Nagar will give a push to the social infrastructure of the city.
Chennai’s second international airport hits a roadblock
The proposed second international airport, which was due to be allocated land in December, has hit a roadblock after the Sriperumbudur site was dismissed. Lack of consensus regarding the exact location of the project, that will be built as an aero city, is cited as the reason behind the delay.
Chennai’s realty market has come under further strain in the latest quarter owing to the internal feuds in the ruling party and ongoing investigation probe related to ex-Chief Minister Jayalalithaa’s death. In the short-term, implementation of RERA with a defined direction and specific timeline for registration of projects holds the key to market revival. Return of political stability and a robust development agenda of the State will play an instrumental role in cultivating a strengthened market environment in the long run.
Revival in average capital prices and rental yields depend on the timely completion of the ongoing metro construction along Nehru Park-Chennai Central stretch and North Chennai. Currently, the major bone of contention is the success of RERA in Tamil Nadu, which is poorly managed with misplaced resource allocation. The absence of a formal RERA Board, paper-dependent registration process and a tedious approval mechanism are acting as roadblocks for Tamil Nadu RERA (TNRERA). In the last six months, only over 250 projects of nearly 120 builders have been registered, while others are still awaiting approvals.
Chennai’s real estate market is still reeling under the pressure of RERA implementation, with diminishing sales and no change in average capital prices in Oct-Dec 2017. New project market largely plateaued, displaying telltale signs of a revival by mid-2018 when more projects would be registered with RERA offering plethora of opportunities to the buyer community. Secondary market, too, has not yet recovered from the impact of demonetisation. The existing political instability at the governance level has further dampened consumer sentiment and restricted recovery. Similar to the preceding quarters this year, the rental segment benefitted from the confusion prevailing in the capital market.
- While the city’s average weighted capital rates did not recorded any change this quarter, Anna Nagar featured at the top of the capital graph with a hike of four percent, QoQ. The locality is home to several residential plots, houses and commercial complexes. Commencement of the new flyover (connecting Nungambakkam) and the implementation of three metro stations facilitated growth in the region.
- A suburban location, Urapakkam has caught the interest of homebuyers owing to the rapid commercialisation, expanding transport network and presence of IT companies in the area. CMDA has plans to build a new satellite bus terminus in the locality sprawling over 50 acres of land, resulting in a three percent hike in prices. Urapakkam offers a wider range of pocket-friendly housing options as compared to its expensive counterpart in the city centre, Tambaram.
- Villivakkam and Perambur recorded a two percent increment in capital prices, each, QoQ. Maximum demand in Villivakkam stems from residents looking out for competitively-priced projects situated closer to the established neighbourhood of Anna Nagar. Perambur’s capital growth is attributed to the host of projects that have mushroomed in the locality over the last three years.
- Average weighted rental ‘asks’ remained stable over the last one year, recording no growth or downfall in Oct-Dec 2017 against Oct-Dec 2016.
- Braving the tide, Sholinganallur and Porur recorded a six percent increment in rentals. More number of people are relocating to city centres such as Sholinganallur to beat incessant traffic blues at Old Mahabalipuram Road (OMR) along the IT highway. Substantial residential options in Porur and the recent inauguration of the flyover easing traffic conditions at Porur signal also contributed to buoyant rental market.
Shortfall in supply of affordable homes continues to haunt Chennai’s real estate market, which is grappling with proper execution of RERA norms and political uncertainty. Diffident homebuyers have withdrawn from the market and are unlikely to return till transparency and accountability pervades the sector. Developers have stalled new launches in the wake of new policies and political instability.
- While demand for under-construction segment slumped by two percent, popularity of possessionready apartments went up by the same margin, QoQ. Poorly-managed RERA has been a spoiler for the under-construction housing category. Withdrawn homebuyer sentiment might change once more projects come under the ambit of RERA. Supply, on the other hand, witnessed marginal alterations across property types.
- The demand-supply gap in the low-income housing category widened further by two percent, standing at 14 percent in Oct-Dec 2017. In the last one year, the gap has expanded by seven percent, signifying the deteriorating state of affairs.
- The mid-income housing segment reported a three percent shortfall in supply in Oct-Dec 2017, consistent with the Jul-Sep quarter. More RERA-compliant projects in the budget category would lead to a parallel rise in demand.
- A contrasting picture is painted in the high-income and luxury segments where demand supersedes supply. While Rs 40-60 lakh budget group saw demand exceeding supply by three percent, demand for units in Rs 60 lakh-Rs 1 crore surpassed availability by 13 percent. Reticent homebuyer sentiment and missing RERA compliance withheld supply across these budget categories.