Chennai seems to have circumvented the economic slowdown that hit the real estate industry last year with a stellar performance. Let us see how affordable housing and ready-to-move-in homes, the primary trends, contributed to this city's remarkable realty story.
Domestic, as well as international investors, are looking for newer, emerging cities with stable assets for investment. Post and during the pandemic, homes have been the centre of our lives and have emerged as a stable asset compared to other investment options such as gold and equities. Homes in cities with a potential for economic growth and robust social infrastructure bodes well for investments. Like every other major market in the country, the residential market in Chennai had experienced specific challenges during the lockdown, but is now on a healthy recovery path, driven by pent-up demand and revival of economic activity.
End-users and investors alike have resumed their search for homes to match evolving needs driven by their experience during the pandemic. There is a rising preference for fast-growing, well-connected, suburban and peripheral residential destinations. Homebuyers are now seeking quality and value-added amenities in well-planned and relatively unpolluted environs.
Chennai is a preferred investment destination due to its robust and vibrant economy driven by the Manufacturing, Auto, IT & ITES industries, upcoming planned infrastructure, increasing presence of multinational companies, evolving job opportunities, and stable property rates are expected to rise shortly. Here are three reasons why one should invest in Chennai Real Estate:
Chennai and its adjoining industrial belt have come to be known as the "Detroit of India" due to the presence of many automotive manufacturers and OEMs (Original Equipment Manufacturers). However, the industrial region in and around the city has grown into being a hotbed for software companies and start-ups in the IT/ITeS sector. With the increasing influx of IT and financial services companies, the industrial estates of Oragadam, Sriperumbudur, OMR, Guindy and Ambattur are now thriving growth hubs with bigwigs like TCS and HCL setting up their offices in these regions. With these new businesses setting up shop in Chennai, the city is emerging as a major IT, automotive and electronic manufacturing hub, which is generating abundant job opportunities, thereby stimulating the demand for residential properties around the city.
In order to promote IT growth, the government has also planned a new IT Park in the Avadi-Pattabiram area. Additionally, the city's economic development has been closely tied to its port and transport infrastructure. The Chennai port acts as a shipping hub that supports the manufacturing base of companies.
Social infrastructure and connectivity:
The social sector comprising of sub-sectors like Education, Health and Medical Care, Housing and Water Supply is essential for any city's economic development. Chennai and the surrounding peripheral regions are thriving with well-developed social infrastructure. Social development paves the way for economic development, which in turn adds to the overall quality of life. The Chennai-Salem expressway project is an indicator of the development happening around Chennai and peripheral locations. Ambitious projects such as these contribute towards the overall development of a city and its surrounding districts. The National Highways Authority of India (NHAI) has designated this project to be of national importance.
The city is well connected with its peripheral locations. The public transport lines across the city are well developed. Chennai has an extensive bus network with frequent services. There are also trains running from the suburban areas that significantly reduces travel time. The Chennai Metro Rail and the proposed Monorail further improve the connectivity of the city with the outskirts. Additionally, the proposed Greenfield airport in South Chennai will likely facilitate a faster and better commute to the city.
Estimates by real estate analytics firm PropEquity show that in this year, city-based developers managed to sell over 2600 new properties in the second quarter of FY21, which is around 120 percent increase, compared to the first quarter of FY21. Various surveys have also pointed out that developers have been innovating on the marketing front to include financial benefits, discounts and easy payment options to attract buyers and sales have seen an uptick in the third quarter of FY21, indicating a strong revival.
According to the National Investment Promotion and Facilitation Agency (NIPFA), 68 percent of Tamil Nadu's population is in the working-age group. Having such a large proportion of earning population signifies huge opportunities for the housing sector. Even when most major cities saw a decline, Real Estate investments have only increased in Chennai, for various reasons. Apart from the promise of a better quality of life and infrastructure, Chennai offers a close-knit community that is also safe for its residents. There are tremendous growth and value appreciation opportunities for the real estate market in the city of Chennai.