vish_1982

I have been thinking about buying a flat in Chennai...my budget being a maximum of 35 Lakhs...I have so many questions in mind and thought someone could help me out...

1. I was hoping some flat near OMR might be a good option as other places like Nolambur, Ambattur, Maraimalai Nagar etc might not grow as much as I expect OMR to grow. Not sure if this is right. Need some guidance here.

2. Places near Siruseri is about 3500/sq ft + 1-1.5 lakh for car park + registration charges. Is it worth investing so much money in a place so far away? My office is in the city and even if I buy a house there probably I still need to continue in a rented accomodation and rent my new house in OMR. The only reason in such a case to think about a house is that it is an investment. Saying all this, I don't have a lot of money in hand. I am planning to pay like the minimum amount required to get a loan and get loan for the rest. Which means I am not getting a house just because I have money but because I am afraid some 2-3 years down the line I might not be able to get a flat in some place like OMR also.

3. The question I have asked in the title, I read about TN planning for a financial city near Perumbakkam. Will this cause the real estate prices in and around OMR to shoot up in the next yr or so? How will or should this impact my decision of looking for a house at this point.

4. I also read in the newspaper that Chidambaram is planning to cancel tax relief from housing loans starting 2011. There would be tax based on the income and the government won't bother anymore if you are repaying loan for a house or not. So if this is going to happen, then the little tax relief that one would expect to get will also be cancelled. Considering this, is it still ok to go for a house?

Any help will be greatly appreciated. Thanks.

Economist

1. There has been plenty of capital investments in OMR Up to Kelambakkam,As there is lot of Infrastructure and Office space in place already - It will get used by patrons.

2. There has been plenty of residential investments by many major builders - It will be sold and occupied.

3. New projects such as financial City In Shollinganalur are on the pipe line.

4. The point 1,2&3 means there will be a major population shift to OMR area and more population means more services will move in to the region.

The above 4 points mean on a long term (5-6 years) OMR area is a great investment.

In the short term (2 years) there may be over supply due to many major projects are completed at the same time (2010 to 2011)

You cant go wrong if you have long term vision (5 year)

vish_1982

Thanks Economist.

rejipeter

I am almost at the verge of finalising a flat in Thoraipakkam for Rs.3550/- per sq ft. i heard DAV school is about to come up in the area and also that there are 2 mega shopping malls which are about to come up. TVH and some more builders are also planning major projects here. I am not sure of any of the above news and hence would like to know if anyone can shed light on the area and the future prospects in terms of development.

Economist

Thoraipakkam is located in a major development corridor in TN.
North of Thoripakkam is Tidel Park I &II and Perungudi (Many SEZ and MNCs)

South of Thoraipakkam is Shollinganalur (ELCOT SEZ and Fin City) and Siruseri and Chemmancheri (Sipcot SEZ, IMU and other education insttutions)

To top it many major township projects such as:
DLF,Hinandhani,Mantri,TVH Ourniya,Purva Cosmo,Purva swanlake,L&T,Bollini hillside,TNHB Shollinganallur etc etc.

unlikely

Dear Vish,

Buying an aprtment just for the sake of 'investment' and funding for it through a loan is not a good idea at all. The bankers and the builders are sure to encourage you but remember that you are the one to be caught in a debt trap if somethin goes wrong.You seem to be young,please be very cautious when approaching a loan- it can ruin your life if you stretch yourself too much.If you have some funds in hand do look for a good plot at suitable location-that will be a prudent investment

contra

Sozhinganallur and perumbakkam are water logging areas. OMR is already crowded.

Bangalore highway or GST road could have been a much better locations for any new city.

Moreover what will Chennai do with financial city, all the trading exchages like the BSE, NSE, NCDEX, MCX all are located in Mumbai.

Lets hope the proposed financial city doesn't end up becoming a Back Office or BPO complex with low cost Clerk jobs. Clerks will not be able to afford Rs.50 lac apartments.

Economist

Financial City is not for front end trading; ever one knows that is Mumbai's role.

Chennai financial city is for following reason:

1.Back office financial processing.
2. Fiancial/Banking related IT such as data center, financial analysis, risk and fraud data mining, Data warehousing etc
3.Accounting and financial analysis for banking and finance Industry.
4.Unit registry for Shares and Funds.
5.Lending and loan processing centre for major banks (Where loan applications will be assessed)
6. Para planning for financial planning industry.
7. Education & Training institution specializing in Finance (CA, Financial planning etc).
8. Call centers for credit defaulters/Collection

It not designed for traders; yes most of it will be for lower to medium level clerical role how ever most can afford 20L to 30L assets and some senior players can afford 1C and over.

The important point is “Population shift or rise” and everything else will follow.

You would need, Doctors, hospitals, restaurants, Shops, mechanics, plumbers, showrooms, theaters, clubs, star hotels like Asiana & Aloft etc.

Vijayasanthi,Hiranandhani,DLF,L&T,TVH,Mantri,Purva nkara,Assindas,Shipping Ministry of India (India’s First and only National Maritime University complex) etc,etc all of them has chosen OMR for a reason.

rickyofsnow

Development… focus shifting to south Chennai - The Hindu 10-10-09


Gone are the plans for offering apartments of at least 1,200-1,500 sq.ft, the norm is now more like 750 sq.ft to make it affordable, writes R.Balaji
Look at the map of Chennai, says Mr G.R.K. Reddy, Chairman and Managing Director, Marg Ltd, to the north, west and to the south the suburbs of Thiruvallur, Avadi, Sriperumbudur and Chinglepet the focus is on industrial development.
But it is the ‘south’ that offers the best opportunity to provide good quality of life.
The city too is growing to the south with development of commercial and residential space. Chennai, in recent decades, has been steadily growing southwards – Adyar, Besant Nagar, Thiruvanmiyur – and now along the Old Mahabalipuram Road up to Siruseri over 30 km away.
The ECR and OMR offer scope for planned development of urban areas close to Chennai, he feels. The 30 km stretch of OMR referred to as the ‘IT corridor’ led the upswing in the Chennai real estate market till last year, and the subsequent fall during the slow down. With an estimated 20 million sq.ft of IT space in the pipeline, the slow down in the IT sector has hit the developers hard. But OMR simply cannot be ignored, says Mr Reddy, and once the revival starts, it is well set to exploit the opportunity.
Unfortunately in the short term, the development has been skewed towards commercial space, particularly IT space while social infrastructure like schools, shopping space, healthcare and entertainment facilities were slow to come.
It is this gap that has been the weak point for OMR. The rapid development also resulted in spiralling land prices which went up to Rs 20 crore an acre and literally priced the product whether office or residential space out of the market.
But that is rapidly being corrected and with that correction and the adjustment in acreage prices that developers are concentrating on, it is only a matter of time before interest is revived, says Mr Reddy.
Residential space itself is in transition, gone are the plans for offering apartments of at least 1,200-1,500 sq.ft, the norm is now more like 750 sq.ft to make it more affordable. Also, the market is picking up definitely, assures Mr Reddy.

contra

Chennai can spread only in 2 directions (1)west (2)south. In north is another state and east is sea, so corporation and other local bodies and also state government since 40 years developed Chennai to spread in south mainly and in west to some extent.

It is actually an advantage because planning is much better. In Bangalore which has spread in 4 directions there is lot of traffic problem, in Chennai traffic is much better controlled and infrastructure like train, chennai metro and roads are also much better planned since all development has taken place in one direction that is South.

However even the western parts like sriperumbathur, arcot, kanchipuram, vellore must also benefit.