Property Prices Of Chennai Realty Market Hits The Sky

Year 2009 has seen the downturn that had spelt doom for the economy, though for a short while the prices of the property in Chennai are on an upward spiral and the realty sector is now witnessing a boom reminiscent of the pre-recession days. Demand of residential property in Chennai has continued to remain high and recovery has been better than other major cities in the south such as Bangalore and Hyderabad. Investors in the Chennai market has a lot to do with its growth story. The rise in the prices of property in Chennai has not been as steep as in other cities such as Mumbai and Bangalore. A lot of speculators work are at work in the market. During the downturn, there was a drop in prices of about 15-20% and post recession, the pent-up demand was partly accountable for the short recovery of the market in Chennai. Seeing the huge growth in the manufacturing and the service sectors in Chennai where Old Mahabalipuram Road has become a favourite destination for the new-age IT Professionals. The home buyers in these areas are from the working group where employees of the IT and manufacturing sectors consist of a huge chunk of buyers in the areas. Having the means and buying property here gives them proximity to their workplace explaining the rising popularity of places like Mogappair, GST and Ambattur. Daimler India, the subsidiary if Stuttgart-based Daimler AG announced a new legislative line at their manufacturing facility in Oragadam. Developments like these have given investors a reason to believe that these areas too will develop in a big way in near future. One of the city based businessman has bought land on the outskirts hoping to capitalise on the growth in these areas. It is also difficult to buy residential property in Chennai. Hence, he have bought a plot on the outskirts because he feel that in near coming future the prices will increase and there will be more development in the areas. Rise in the price of property in Chennai is being ascribed to the increased price of land and the recent hike in the guideline value has only added to the cost. In 2005-06 the cost of construction was Rs. 1000 per sq ft while it has raised up to Rs. 1600 per sq ft. The cetheir ment manufacturers capacity in the have last doubled three years though the production is only one-fourth of the capacity. Increase within the price of construction could be indicative of some quite artificial shortage within the steel and cement business resulted within the hike of increased in construction activities. Most much construction is going on and even with higher costs, individuals are buying property in Chennai. Chennai market is not accessible for all investors anymore with the available resources it is simply not possible to invest in areas like Kodambakkam or Mylapore. But investors are hopeful of development on the outskirts as well. As it is well known fact that Chennai real estate is predominantly an end user’s market. This fact gives the realty scene in the city some stability as people are buying property in spite of high prices because they know that if they don’t decide now the price of the property in Chennai will increase even further.