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Property Price Trends in Chennai

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  • Re : Property Price Trends in Chennai

    Since most of the visitors here are directly in IT, it influence them to think IT is the only field that pays high money. On average IT comp is better than others however there are so many profession that pays much higher than IT salary. Few examples Doctors, business Consultants, building architects, lawyers, store owners, Cine artists, contractors etc.. They can't afford to live in OMR and work in CBD which is suicidal to their careers.

    So please stop comparing IT parks and related employment. IMO RE is peaking overall in India and suburbs are more vulnerable to volatility. Going forward the trend is that the price will catch up with inflation and no bull market anytime soon. There will be another bull market only after when everyone stop talking about RE. I am amazed how still folks believe that there would be dramatic price increase in near term. If you are investor justify the price entry point and have patience over it. Eventually you will be rewarded.
    Last edited November 21 2012, 11:00 PM. Reason: spelling

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    • Re : Property Price Trends in Chennai

      The reason behind home buying is now different. I have hardly heard any of my previous generation saying "we were forced to buy here... or compelled to buy here" In those days people used to earn , save enough and then think of buying houses near temples etc and never shrugged away from walking miles for transport. They had higher levels of patience and foresight.

      Now the buyers are extremely different. Its all about loan eligibility or NRI money , 2nd, 3rd flat etc. Flats are being bought by the major middle class out of fear of losing out on one. On the other side, no one is even ready to walk 500 mtrs, and are ready to shell out money for lot of things. For power cuts, there is Generator, for lack of water, they can order tankers etc so on and so forth. Impatience is the word!
      I might not make sense here, but I am questioning the thinking "the suburb has to grow anyway like the current city".
      CBD itself has grown to huge proportions only in last 10-15 years but I feel this was matched to some amount by the growth of social infra.
      Suburb prices are spiraling to hugh proportions without any sense, many times more than it deserves, and this is not right to say , "It usual that Prices increase , and infra will follow". Places near Thoraipakkam are being taken to 6000-6500 range and it is definitely not due to the fact that it has better infra than other places in OMR, neither those in GST (I am neutral to all over priced locations).
      Some one who pruchased a flat for 75 lakhs in Thoraipakkam, will defnitely expect for better social infra as 75 lakhs is still a huge individual investment but when will the Infra follow? Because they didnt enter at similar affordability as someone 15 yrs back would have.

      Are the suburbs as affordable as the earlier city used to be ? I dont know the answer.

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      • Re : Property Price Trends in Chennai

        Forgot about infra development, first let us get power 24 hrs. Power situation is going insane. It seems there is power grid issues in TN and it will take at least a year or 2 to build the grid to take the power. Next autos should be regulated and it is insane that they charge more than call taxi rates. Next there must be power in all traffic signals and it is horrible to drive thru intersections. Next the metros should be completed on time otherwise important road such as mount road become unusable if it continues at this rate.

        So there are challenges even with in CBD to make it more usable. Now I am wondering how long it would take for places like Orgadam, OMR south etc to get developed. Even in East Tambaram the drainage work is barely started and the place exists actively since 1970s.

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        • Re : Property Price Trends in Chennai

          We have this sub-urb vs City sprout every now and then. Market dynamics will take due course on demand-supply and as an investor ROI matters; if end-user it's convenience which is paramount to potential appreciation. Zaveri Bazaar can't be in more dingy place, still sort after....

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          • Re : Property Price Trends in Chennai

            Originally posted by sunr2i View Post
            Since most of the visitors here are directly in IT, it influence them to think IT is the only field that pays high money. On average IT comp is better than others however there are so many profession that pays much higher than IT salary. Few examples Doctors, business Consultants, building architects, lawyers, store owners, Cine artists, contractors etc.. They can't afford to live in OMR and work in CBD which is suicidal to their careers.

            So please stop comparing IT parks and related employment. IMO RE is peaking overall in India and suburbs are more vulnerable to volatility.

            Interesting. I know a highly sought after and established Doctor in Chennai, who lives inside the city, works at one of city's biggest hospitals and is a senior consultant. This person is a born and bred Chennaite.

            I am from Bangalore, but keep following RE in Chennai like Velachery, OMR etc. On many occassions this Doctor has asked me to find out, refer some site in Velachery. This Doctor always eagerly wants to relocate to Velachery because of huge demand. A Doctor who is so sought after and established in Chennai feels Velachery is the place to be.

            So Doctors have already discovered the value of suburbs like Velachery. Still some members in this forum are talking like 1980.

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            • Re : Property Price Trends in Chennai

              But I do agree that in Chennai, except Velachery every other suburb sucks.

              Velachery is the only suburb which has developed good social and commercial infrastructure to sustain its residents. All other suburbs have flopped, somewhere even the builders have completely ignored this aspect. Just constructing 5000 apartments is not enough, where are the shops, malls, multiplexes, international schools etc.

              In contrast when I look at Bangalore, suburbs in every direction south, east, north etc have good social, commercial infrastructure to sustain. Here again I mean suburbs like Bannerghatta Road or Yelahanka. I am not talking about frontier areas or exurbs like Devanahalli etc.
              Last edited November 22 2012, 08:57 AM.

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              • Re : Property Price Trends in Chennai

                sunr2i perfectly gauged and sensed the pulse and segement of Buyers profile here . Though IT corridor was formed to establish IT SEZ and Residenial townships for its Employees , it is the other professionals mentioned in Examples chased RE here vehemently and invested heavily much before IT crowds by pushing them in sides . They have invested with presumption that good Rental returns from these Investments and also for Second Week end home as per my observation.

                The surprise is that many of theses are moving into slowly . IT people salary is Lower as it is IT deducted every month unlike other Professionals. We all see in real life how doctors collect Cash, Lawyers charge hefty fee, Store owners sell groceries without bill and let us spare Cinema Actresses!!! in lighter vein .

                From time immemorial, IT deducted Earnings of Working / Salaried Class is always lower than Business Class

                Hence those business class buyers are not surfing Internet and post here with their views

                Originally posted by sunr2i View Post
                Since most of the visitors here are directly in IT, it influence them to think IT is the only field that pays high money. On average IT comp is better than others however there are so many profession that pays much higher than IT salary. Few examples Doctors, business Consultants, building architects, lawyers, store owners, Cine artists, contractors etc.. They can't afford to live in OMR and work in CBD which is suicidal to their careers.

                So please stop comparing IT parks and related employment. IMO RE is peaking overall in India and suburbs are more vulnerable to volatility. Going forward the trend is that the price will catch up with inflation and no bull market anytime soon. There will be another bull market only after when everyone stop talking about RE. I am amazed how still folks believe that there would be dramatic price increase in near term. If you are investor justify the price entry point and have patience over it. Eventually you will be rewarded.
                Last edited November 22 2012, 11:16 AM.

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                • Re : Property Price Trends in Chennai

                  Originally posted by k11 View Post
                  Less than 5% of Chennai population work in IT companies in OMR.
                  So for an IT employee, OMR is very attractive. For rest of the public it is a hassle. For NRIs and IT workers, suburbs are a good choice as many have cars and have access to easy transportation.

                  Of course, I understand most forum members belong to this 5%. I do agree with you.
                  I do not belong to this 5%.

                  What I observe is since there is a lot of availablity of office buildings, residential units of all types, comparatively better road and also nearer to city compared to GST areas (Vandalur,Urapakkam etc) and Oragadam/sriperumbudur areas, OMR is bound to attract non IT sectors also over the period of time. This is already happening.

                  Couple of decades ago what happened in Mount road ( Offices on mount road and houses off mount road) may happen in OMR in due course of time
                  Last edited November 22 2012, 11:49 AM.

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                  • Re : Property Price Trends in Chennai

                    Originally posted by sunr2i View Post
                    Forgot about infra development, first let us get power 24 hrs. .
                    Power situation is a different issue.

                    The poshest areas of Coimbatore or Madurai also face 12 hours power cut.

                    The slums of chennai areas get just 2 hours power cut

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                    • Re : Property Price Trends in Chennai

                      Uff.. Its getting tired to read all this talk about suburbs from an investment perspective alone. Investment is not important for most of the people signing up into this Forum. But its going that way , and hence the discussions here look more focused towards that.

                      Lets first look at the immediate necessity which is end-use - first home. I concur with @Clairvoyant, that End -Use means convenience and comfort. As simple as that.

                      Its the failure of Govt and Town planning which has left the suburbs the way it is. Why complain about the people who want to stay close to CBD? I still find Sewage dept, BSNL, TANGEDCO(TNEB) heeding to complaints in CBD faster than they do in the suburbs. Its these depts negligence which needs to be criticized rather than questioning Chennaites thinking!

                      Right now many are confusing the heavy price rises in Suburbs with growth. But they both are independent!
                      Last edited November 22 2012, 03:06 PM. Reason: spelling

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