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Property Price Trends in Chennai

Last updated: 3 weeks ago
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  • Re : Property Price Trends in Chennai

    Thanks RaviCbe, Economist, Sundarjp, kannan1, K11 and SR for your valuable views.

    Locality names are misleading, one has to look at the pincode to identify the correct location. Even Padi is being called Anna Nagar..Ayanavaram is called kilpauk..Pallikarnai is called Velachery..thats the way it is. Anna Nagar East is currently going at 15-16K/sqft as Economist is saying. Prices differ every street, Anna Nagar which is cheap is in the low lying L-Block region, The Shenoy nagar which is cheap is on the opposite side, behind pachiappas college..and the kilpauk which is cheap is behind the cemetry. Good Places and location are selling at huge premium.

    Coming to back the main topic, I also feel Chennai RE esp flats are fast approching the saturation level. I was recently talking to a builder on a prospective project in T.Nagar. He was saying they were hoping to price it at 18K, but current ongoing projects are not moving at 15K..so they are waiting to launch only next year. This was the same I heard in 2008. Builders then in Anna Nagar were having future projects scheduled at 12K but couldnt launch till 2010 at that price.

    Another interesting fact that seems to be coming out of this discussion is almost everywhere around chennai people have seen RE appreciation. This is irrespective of infrastructure development or existing supply. Depending on the entry price the rate of appreciation seems to differ. On an average we see a strange coincidence that flat price have appreciated as much as 3000-4000/sqft across chennai. Adyar which was quoted at 12.5K for new projects is now being sold at 16K, Sholinganallur which was sold at 3000/sqft is being sold at 6000/sqft, Velachery which was selling at 5000/sqft is being sold at 8000/sqft. The scope of faster appreciation is higher when the entry point is at 4000-6000/sqft, there seems to be a good possibility of the property reaching 8000/sqft in some years..But the same cannot be said for a property being sold at 8000/sqft, it will appreciate more slowly.

    The point I am trying to make is Instead of looking at % returns, looking at per/sqft price increase gives a truer picture of what we can expect in future, a 1000/sqft increase on 5K/sqft is 20% increase, whereas on a 10K/sqft flat its only 10%..does a 10K/sqft flat have scope to increase 20%? to keep up with emerging localities? The appreciation appears to be more in line with inflation cost and the increase in registered value and construction cost. Otherwise the appreciation wouldnt be uniform across the board..Some location and good projects getting the additional the 20% premium should be considered exceptions. I am not able to pin-point a particular locality that has done extremely well and a locality that will do extremely well in future..If Chennai RE market is stable, it appears all places will appreciate by default. .
    Last edited June 4 2013, 08:04 AM.

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    • Re : Property Price Trends in Chennai

      Good Job, Eco for posting the map. I am sure myself and others are always confused about areas. Developers and brokers are largely responsible for misinformation and add to the confusion.

      Nabishek,
      You bought an important point. Increase in construction cost. I think this plays a big role. Some areas actually did not appreciate that much but the construction cost increase has added value to the property.

      Of course, for the buyer it does not matter where the appreciation comes from, whether it is the area going up or construction value of the apt goes up. Appreciation is a paper profit irrespective of however it is generated.

      I feel going forward the market will be slow till the end of 2014. Until the upcoming election and improvement in economy, there might not be much movement. But the construction cost will continue to go up.

      I know it is not right to compare construction costs around the world, but with the increasing globalization and % of imported material, they are somewhat related.
      In Singapore, each sqft costs 16K to build.
      In US at NY/Chicago, it costs 11K to build.
      In Chennai, for a nice 20+ story building it costs 2.5K to build.
      These are rough figures, there are lot of variations.
      Now, I feel the differences will start to come down. India will be always cheaper but any increase in global material cost will make Indian costs shoot up.

      I see construction costs go up by around 25% by end of 2014. So atleast 500-600+rs will be added to flat prices in the next year and half.

      As the construction prices go up, builders would become selective in launching projects in faraway locations. We might see more supply coming in established locations, where developers will feel it is easy to sell.

      Apt prices and land prices are interlinked. Once developers start ignoring an area because of high consturction cost, there will be some pressure on the big parcel land owners to do come down on prices. Lets say a project construction cost hits 3K psft or 40L for a 2-bhk in construction cost itself. The developer will decide to ignore Thirporur or Chengelpet, becasue it will be hard to sell or there is no market for 4K psft or a 55L flat. So the parcel landowner has to come down in price for outright sale or JV.

      All of this is theoritical, might not happen. But there is chance that high construction costs will affect the market negatively too. It might not all be positive.

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      • Re : Property Price Trends in Chennai

        Which area is biggest pincode in chennai based on population.
        Is it Villivakkam or Velachery or Annanagar. Areawise Anna nagar looks biggest.

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        • Re : Property Price Trends in Chennai

          All the three might not have enough population.

          Mylapore, Triplicane, Park Town are big in population and size.

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          • Re : Property Price Trends in Chennai

            I feel that sithalabakkam area has only individual house ( Medium level houses may be not very posh high level buildings ) and many medium level apartments ( 10 to 20 flats apartments ). I do not see any villa projects announced in sithalabakkam area.

            But in ponmar,
            1. Case grande pahse1 villa project
            2. Phase 2 is also announced
            3. Artha villa ( 100+ villas )
            4. Artha apartments ( 100 or 150+ flats ??? )
            5. Jones foundations villas
            6. some individual houses ( 2 or 3 houses???) and others waiting for the right time.
            7. Lots of land is waiting for the new projects announcements.


            Based on the above scenario, may be in 7 to 10 years ponmar will have
            better living place than sithalabakkam.

            But obviously sithalabakkam may have all the infrastructures faster than ponmar. The compost yard is the only major negative point in Ponmar.
            I am not sure, may be in later years it may not be big issues because we are seeing many residence projects are available very near to many dump yards.
            Last edited June 5 2013, 12:17 AM.

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            • Re : Property Price Trends in Chennai

              None of the builders are doing high end projects in Ponmar or Sithalapakkam or anywhere on Medavakkam-Mabakkam rd. Most builders are the smaller guys. Most of the people here prefer plots over Apts and Villas in this market. Even Medavakkam itself does not have many high quality townships. But atleast it is bit more developed.

              I feel the main OMR Rd would be a better place.
              My pick is the Navalur-Siruseri stretch to improve and outperform the other areas. My prediction is that in the next ten years or so the Navalur region will be trading at a significantly higher premium compared to any other area in Medavakkam-Mambakam Rd.
              Last edited June 5 2013, 12:30 AM.

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              • Re : Property Price Trends in Chennai

                Originally posted by k11 View Post
                None of the builders are doing high end projects in Ponmar or Sithalapakkam or anywhere on Medavakkam-Mabakkam rd. Most builders are the smaller guys. Most of the people here prefer plots over Apts and Villas in this market. Even Medavakkam itself does not have many high quality townships. But atleast it is bit more developed.

                I feel the main OMR Rd would be a better place.
                My pick is the Navalur-Siruseri stretch to improve and outperform the other areas. My prediction is that in the next ten years or so the Navalur region will be trading at a significantly higher premium compared to any other area in Medavakkam-Mambakam Rd.

                I was comparing only sithalabakkam and ponmar, but you are correct when compared navalur, either sithalabakkam or ponmar does not have any high end projects. after kelembakkam also we are seeing many high end projects like today, pbel, the village , urbania which is not happening in sithalabakkam and ponmar.

                As i have already mentioned in other thread, If you see the land rate is cheaper in ponmar than thaiyur area. both of them not having any infrastructures.

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                • Re : Property Price Trends in Chennai

                  Originally posted by kannan1 View Post
                  after kelembakkam also we are seeing many high end projects like today, pbel, the village , urbania which is not happening in sithalabakkam and ponmar.
                  Actually the projects you mentioned are mid grade projects.
                  Today is a 3k rs project with mid grade specs nothing spectacular, same with PBEL, etc.

                  High end projects, I mean Hira Upscale, Olympia Opaline and Panache Villas, etc. Navalur Strech is getting more well to do people moving in.

                  Ponmar projects like Artha, Jones Foundation, etc all gets under budget projects. I would not even call them mid grade projects.

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                  • Re : Property Price Trends in Chennai

                    Originally posted by k11 View Post
                    Actually the projects you mentioned are mid grade projects.
                    Today is a 3k rs project with mid grade specs nothing spectacular, same with PBEL, etc.

                    High end projects, I mean Hira Upscale, Olympia Opaline and Panache Villas, etc. Navalur Strech is getting more well to do people moving in.

                    Ponmar projects like Artha, Jones Foundation, etc all gets under budget projects. I would not even call them mid grade projects.

                    K11 with your standards in view, do you consider Olympia Opaline High End
                    Street view is pretty much a POS

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                    • Re : Property Price Trends in Chennai

                      Originally posted by k11 View Post
                      Actually the projects you mentioned are mid grade projects.
                      Today is a 3k rs project with mid grade specs nothing spectacular, same with PBEL, etc.

                      High end projects, I mean Hira Upscale, Olympia Opaline and Panache Villas, etc. Navalur Strech is getting more well to do people moving in.

                      Ponmar projects like Artha, Jones Foundation, etc all gets under budget projects. I would not even call them mid grade projects.

                      Yes true, whatever i mentioned it is mid range not high end. But this mid range projects also are not happening in ponmar now.

                      I need suggestion on buying a plot near thalambur ( near Grand ellora project ). I have also seen the video which is showing the route to grand ellora place. I just want to know will it be ok if we buy land near to that.
                      do you have any price range details in that area?

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