High-Rise Market Of Chennai

Market of residential property in Chennai has been the most stable among urban centers in the India. The residential price index brought out by the National Housing Bank, Residex shows that except for a slight correction in 2008 account of the global economic slowdown, an apartment prices in Chennai registered a steady growth every quarter. Chennai witnessed the maximum growth of 196% between December 2007 when NHB started recording Residex and December 2011. The prices of residential property of Chennai softened all through 2008 they went up by 48% in 2009, 49% in 2010 and 38% last year. These figures do not reflect Chennai’s suburban markets which was not covered by the study. Pune and Mumbai are only other markets that remained fairly steady during same period. Most other cities have a chequered graph like Kolkata, Faridabad and Bhopal despite growing during the turbulent times in 2008. However there are some worst markets like Jaipur, Hyderabad, Kochi and Bangalore in that order. Below the 2007 base index of 100 points Jaipur is 36% below, Hyderabad 21%, Kochi 18% lower and Bangalore has just about recovered to the 2007 mark. There is a fine balance between the demand and supply where Chennai has traditionally been a conservative end user’s market noted by Secretary Mr. T Chitty Babu of Confederation of Real Estate Developers’ Association of India. Chennai is the first city to recover from the 2008 fall and its suburbs have seen robust growth in automobile, textile and leather industries, telecom, over and above the IT sector. Over one lakh jobs have been generated annually in past two years. The central business district (CBD) or the core city doesn’t have much space for creating new residential stock. When average income people and below average income people move to suburbs and the affluent are keen on staying within the city pushing the prices of residential property in Chennai as noted by Mr. Babu. Location like Nanganallur, Mogappair, Adambakkam and other residential hubs on the periphery of the Central Business District which were havens for the middle and lower middle income people for close to two decades have become exceedingly expensive over the past years. For example: Builder developing a 64-residential Property in Chennai, Nanganallur is quoting Rs. 8,500 per sq ft for its residential project. The overall price of the smallest apartment in this residential project is close to Rs. 1.25 Crore. This location where the price was in region of Rs. 3,000 to 5,000 till recently and one could buy a dream home for less than Rs. 30 Lakh. There is another builder as well who is demanding Rs. 9,000 per sq ft at Mogappair. One of the leading banker said: one can understand if a builder quotes the price in CBD. Builders are elevating the prices all over and making Chennai an unaffordable for the masses. Chennai is not an island which will remain permanently insulated from the rest of the world where realty is like the stock market nobody knows when it crashes.