Chennai and Bangalore are the leading cities driving the real estate market of South India
. The silicon valley of India is obviously much desired but is expensive driven typically by influential dynamics such as infrastructure and commercial real estate development, connectivity, land availability and most importantly the disposable income levels of the people residing in any given area.
But the Chennai properties market tends to behave a bit differently much to the benefit of the end users as well as investors. This is how
Nature and Demand
The most evident demand in residential properties can be felt in the mid-end category. Affordable housing is the buzz word here and the investors are in for long term. There isnt much room for speculation in the market which has helped it survive the global economys ups and downs.
Stability
The real estate market enjoys a good deal of stability in Chennai as it is truly driven by the ultimate consumers rather than external developments and amenities unlike the trends that can be seen for property in Pune. The location matters the most for Chennaites which is why prices have been rising in residential areas closer to IT parks.
Market Segmentation
The central part of the city enjoys the highest prices but it is the western zone that is seeing most of the upcoming projects thanks to the electronic hardware concentration along Sriperumbudur. The south part is experiencing rapid arrival of IT companies which is why it is set to be the next residential investment destination while the north continues to be a bit less developed than the others.
Booming Market
According to the National Housing Banks Residex1, the citys index shot up by 39.5% in the quarter January to March 2012, also being the highest to do so. In India, only 9 cities crossed the 50% growth mark in the past five years, Chennai again leading the way with a mighty 204%. No wonder investors would rather put their money in a suburban Chennai property instead of a 1 BHK flat in Mumbai.
Builder Behaviour
Most of the focus on the builders side has been on expanding the affordability segment through cautious and realistic pricing strategies. Developers are also looking more towards the suburban regions which may work well for their affordability goals provided infrastructure develops too. The high priced floor space index (FSI) and scarcity of land within the city along with increasing construction and loan costs are some other reasons for the suburban inclination.
Overall the Chennai properties in 2012 continue to ride on a stable growth curve.