Chennai’s real estate recorded a decent surge in property prices by seven per cent last year. Continuing the growth trajectory in 2014, the city clocked three per cent rise in the July-September 2014 quarter when compared with April-June 2014 quarter.
- Capital values in localities in West Chennai rose at an average of 10 per cent in the Jul-Sep 2014 quarter. The West was followed by South Chennai that saw an increase of three per cent and then North, where capital values went up by an average of two per cent.
- Adyar, an old and prominent locality of South Chennai, recorded the highest growth in the city, to the tune of 23 per cent, continuing its one year rally of 30 per cent. Capital values also strengthened in Adambakkam in South by 22 per cent.
- Choolaimedu was the frontrunner in West Chennai having gained 14 per cent in the quarter ending September 2014.
- Areas such as Kattupakkam and OMR witnessed stagnancy or decline in buyer sentiments. These localities are either awaiting infrastructural development or are witnessing a price correction.
- The Moulivakkam tragedy somewhat dampened investor spirits bringing about a nine per cent dip in Manapakkam in the Jul-Sep 2014 quarter after clocking in a growth of seven per cent last year.
- Capital value growth in Kilpauk in South Chennai came to a halt this quarter despite a hike of 10 per cent last year. Since this locality offers options in primarily the luxury segment, prices are already high resulting in limited demand.
- Development of grid roads along the Outer Ring Road (ORR), connecting NH-45 at Vandalur in the South-West with the Tiruvottiyur-Ponneri-Panchetty (TPP) Road at Minjur in the North
- Implementation of infrastructure projects, such as road and rail overbridges on the highway to reduce traffic clogging
- Advancement in the metro system envisioned to integrate various public transportation
- Creation of new inventory through re-development of property through demolition of old structures and construction of new three-four storeyed buildings with modern amenities
Top Non-Performers in Chennai (Residential Apartments)Rental Analysis
- Rental values in Chennai rose marginally by one per cent last year. Between Jul-Sep 2013 and Jul-Sep 2014, rentals in Central Chennai increased by an average of 17 per cent, while North and West Chennai saw hike in rates by eight per cent. Contrasting this uptrend, South Chennai witnessed an average decline of three per cent.
- Chetpet in Central Chennai clocked the highest growth in rental rates with 30 per cent over a period of a year. The locality scored high due to its proximity to Mogappair West that is home to plenty of IT Parks and the prime residential-cum-commercial centre, Anna Nagar. IT Parks and commercial hubs attract a lot of professionals from different parts of the country who take up accommodations on rent, leading to increase in demand. Chetpet also enjoys excellent connectivity with neighbouring localities of Pullapuram and Kilpauk since National Highway-4 and Poonamallee High road pass through the locality. This factor keeps rental prices afloat.
- Guduvancheri saw the steepest fall of 20 per cent as per year-on-year analysis. A probable reason for the low rental rates is its geographical position–the South Chennai periphery.
|LOCALITY||APR - JUN '14||JUL - SEP '14||% CHANGE|
|R. A Puram||15500||16000||3%|
“Mass Rapid Transit System was a game changer for Adyar, Adambakkam and Thiruvanmiyur where prices increased by an average of 18 per cent.”Residential Market Analysis • The average increase in capital prices of the top 10 performing localities is 12 per cent whereas the average decrease in the capital prices of the top non-performing localities is three per cent. Most of these localities have witnessed an increase in capital values in all of last year, with the exception of Adambakkam. • Adyar’s real estate graph continued its steep climb upward, recording a growth of 30 per cent last year and 23 per cent in the September ending quarter of 2014. Re-development of old ancestral properties into luxury destinations has resulted in creation of new inventory with new amenities. Furthermore, the recent cleaning of the Adyar River has contributed to improvement in consumer sentiments. Adyar’s location on the Old Mahabalipuram Road (OMR) and connectivity facilitated by the MRTS, which runs via this area, is also one of the factors contributing to its buoyant realty market. • Adambakkam in South Chennai witnessed a spike of 22 per cent in capital prices despite a slight slump of four per cent last year. The completion of MRTS rail extension to St. Thomas Mount Railway Station earlier this year boosted capital values greatly. In addition, the overhaul and widening of roadways leading to the developing southern suburb of Medavakkam has also contributed to the area’s growth. • Choolaimedu, in the west, a residential-cum-commercial area, owes its year-on-year growth of 29 per cent and quarter-on-quarter growth of 14 per cent to its excellent physical infrastructure. The Nungambakkam railway station is at an easy distance of 1.2 km from this locality. Its neighbourhood houses the bustling Chitra Avenue residential-commercial complexes and is home to the prestigious Loyola College. The area is in proximity to Chennai’s commercial centre, T Nagar, and is currently witnessing development of several super malls, markets and eateries. • Porur in South Chennai, too, saw a 14 per cent rise in capital values in the last two quarters of 2014. This emerging locality draws its growth from the arterial St. Thomas Mount-Poonamallee Road, which connects Kathipara Junction to NH-4 and extends to Porur as well. This has made Guindy and Poonamalee areas easily accessible. This locality is slowly but steadily developing into a major IT hub due to the IT Special Economic Zones (SEZ) - DLF IT Park, Jayanth Tech Park and TCG IT Park, which is another reason for price rise. • Thiruvanmiyur, another southern locality, recorded a growth of nine per cent in the September ending quarter of 2014 and that of 33 per cent last year. The growth trend can be attributed to the area’s transport infrastructure; in particular, the Thiruvanmiyur Railway Station which is on the MRTS, connecting Velachery and Chennai Beach. • Kattupakkam and Manapakkam in South Chennai fall at a distance of approximately 4 km from Moulivakkam, where collapse of an eleven storeyed under-construction building in June possibly led to stagnancy or decline in prices in the neighbouring areas as well. Kattupakkam and Manapakkam had seen an increase of three per cent and seven per cent last year, however, there is no price movement in the Jul-Sep quarter in Kattupakkam and a steep decline up to nine per cent in Manapakkam. • OMR witnessed a spike of nine per cent last year and a dip of four per cent in the Jul-Sep 2014 quarter when compared to the previous. Owing to the presence of large number of IT and ITeS companies, the real estate prices of localities along the belt have been inflated. However, the properties did not see high demand. • Navalur, Sholinganallur and Siruseri fall in the southern belt of the OMR and the dipping numbers (one per cent) are a result of slowdown in sales due to over-supply. • While Mogappair West remained stagnant in the last two quarters, property prices in the area had increased by 15 per cent last year. Several IT Parks which were being developed since 2010 were completed last year and this drew a lot of professionals from other parts of the country, thus leading to the hike in price. However, certain infrastructural developments are being implemented to improve connectivity between this area and Anna Nagar in the northwest. It is being speculated that percentage rise in price later this year will be at par with last year.
|LOCALITY||JUL - SEP '13||JUL - SEP '14||% CHANGE|
|Anna Nagar East||20||23||15%|
|R. A Puram||25||26||4%|
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