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Property Price Trends in Chennai

Last updated: May 20 2021
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  • Re : Property Price Trends in Chennai

    Just because someone pays so much for smaller plots, you cannot expect flats to get corresponding rates.

    TNHB Shols - You guys say 4K psft for plots. Flats are being sold at 4-4.5K with no takers.
    I have been saying 3-3.5K tops for apt in that project right from the beginning.

    Iyyapanthangal, Porur - If the land is sold at 4K, how can flats sell at 6.2K and that too it is only the base rate.
    It is super expensive when extra charges are added which could be another 2K+.

    Let's say if I consider both Porur and Shols are areas with similar prospects.
    If I say PBV is a value, I cannot say TNHB Shols is a bad deal.

    I remain consistent in my views, both are overvalued.

    Individual plots might have demand from non-endusers and NRIs. But Flats do not trade at same levels.
    They always trade much lower. Especially in slow markets it could be even bigger gap.

    Builders like Prestige will always make money. It is not their land. Most Bangalore builders do JV projects. The landowner loses more money, Prestige is not incurring any cost in form of interest payments, so slow sales do not impact them a lot. Even if they buy land, they buy it at 1/4th the price of small plots or even less.
    Builders do not pay retail prices in suburbs, they cannot do big GCs at such high prices. They do keep flat prices high to recover inflation in construction costs and maintain their profit margins.

    To make thing even more clearer, My opinion is that even land prices are jacked up in many areas.
    I would not pay 4K for land in both TNHB Shols or Iyyapanthangal. Again this is if it was my money.
    I am keeping my money in stocks and fds. I will stay away from Builder stocks.
    Last edited July 7 2014, 09:19 AM.

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    • Re : Property Price Trends in Chennai

      Originally posted by SRaj001
      Lets look at what is so gloomy about indian market today. granted there is complaints about frozen salary hikes and less hiring in the IT segment, but the broader macro indicators looks pretty strong and particularly market feels strong about the RE sector.
      There is no gloom as portrayed through price correlation. Prices do not move, not many takers and hence there is a gloom can be a bad inference. It is the stupid price that should be the focus. There are still takers for the project positioned and priced right. Good and small time builders are still selling with out advertisement because they 'get' the market and price it right. During the non-euphoric times, people become selective and choosy.

      Euphoric period is an aberration and there are periods where salary hikes are nominal/hiring is sub-par which lasts much longer than periods of euphoria. Markets have a way to adjust and if we think that prices paid in euphoric time to keep rising in a linear fashion, it is a problem with our thinking. If the prices stop rising, there need not be a gloom and markets can still be fine.

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      • Re : Property Price Trends in Chennai

        I dont think you can compare prestige pricing to TNHB in shols, its called comparison by comfort.
        Im not a flat buyer but i looked at a few developments that are non -TNHB and the pricing are in 5500-6000 in that area .
        Khurinjis Gloxinia, Chennai is one example.

        From a social infra standpoint porur main road is much ahead than shols area particularly the TNHB corridor.
        So its not even a good comparison.
        The problem with PBV is just the extras they charge, 2 of my friends bought 3BHK at 4400 entry price, but total end cost was 1.15C plus interest charges for 3 years.
        That was the main reason i pulled out. The worst part is they would deliver all 2300+ units the same time, which kills all rental prospects if you are an investor.

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        • Re : Property Price Trends in Chennai

          TNHB apartments in shols cannot be equated to PBV in porur merely based on land prices. One is a soviet style govt housing project while other is a private township with clubhouse and other amenities.

          Also land prices need not directly correlate with prices of gated community apartments. It is like saying McDonalds must price their burgers based on selling price of wheat, tomato, chilly, chicken, spring onion, etc... Or comparing McDonald's pricing with road side canteen and accusing McD of selling overpriced commodities.

          Value of a product = sum of raw material cost + labor cost

          This formula may be true in bygone socialistic economy, but not anymore. People have lot of choices and demand a product that meets their specific requirement. They are also willing to pay premium for it.
          Last edited July 7 2014, 10:28 AM.

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          • Re : Property Price Trends in Chennai

            Originally posted by Love4land View Post
            TNHB apartments in shols cannot be equated to PBV in porur merely based on land prices. One is a soviet style govt housing project while other is a private township with clubhouse and other amenities.
            I am equating it price wise. Forum members put the same value in both TNHB and this thread. I am not comparing features or pros/cons of one area vs other. I would let rest of forum members decide if Soviet style is better or otherwise. Of course you have plus points of OMR, there are various other factors. Area comparison is outside the topic.

            My point is flats cannot sell at 6.2K base + whatever extras (2K or so) in areas where plots trade at 4K. Again this is my personal valuation, not everyone is forced to accept it. I am not the market.
            Same goes with TNHB. Govt cannot sell flats at 4.5K in that area. I assume 1K premium for better construction in private development. My price point for flats in TNHB Shols is 3-3.5K. For private developer in the same league as Prestige with all the features in Shols I might consider 4-4.5K. Still would be lower side if it was my money.

            If people found these projects as deals they would not be in discussion.
            They would have been sold out long time ago.

            Originally posted by Love4land View Post
            Also land prices need not directly correlate with prices of gated community apartments. It is like saying McDonalds must price their burgers based on selling price of wheat, tomato, chilly, chicken, spring onion, etc... Or comparing McDonald's pricing with road side canteen and accusing McD of selling overpriced commodities.

            Value of a product = sum of raw material cost + labor cost
            You are contradicting yourself.

            McDonald Burger ~= Sum of Wheat, Tomato, Chilly, Chicken, Onion, etc + Labor + Margin.

            McDonald's labor and margin might be different from roadside canteen.
            But if prices of ingredients or labor goes up, McDonald's will increase prices.
            They will not sit and take a loss. It is a multi billion dollar company with shareholders demanding higher profits.


            Originally posted by Love4land View Post
            This formula may be true in bygone socialistic economy, but not anymore. People have lot of choices and demand a product that meets their specific requirement. They are also willing to pay premium for it.
            Yes, people have choices. Wouldn't Prestige sold all it is apts by now after so many years.
            Why are people not paying premium for it.

            Is it possible that people do not see value in it.
            Is it possible people think it is unaffordable.

            Listen to market, observe the take rates.
            You, me and rest of forum members might be totally wrong from what is happening on the ground.
            Last edited July 7 2014, 10:54 AM.

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            • Re : Property Price Trends in Chennai

              How is OMR an advantage for TNHB flats in Sholinganallur? They couldn't have launched it in a worser location. Buyers are spoilt for choice in that locality. You have apartments at various price ranges and targeting multiple classes. We have projects like Euphoria as well as Renuka Sangamam in the same locality.

              Porur is a different matter altogether, PBV was the first major township in that area. It is also a natural extension of Central chennai. They have a huge untapped market comprising of well to do non-IT buyers who want to live in Gated community.

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              • Re : Property Price Trends in Chennai

                If this is your money, what prices will you buy plots in these two locations.
                Also what prices would you buy flats in these locations.
                Will you buy PBV, TNHB Shols flats? Prices?

                Would like to know how much your opinion varies from market list prices.

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                • Re : Property Price Trends in Chennai

                  RE Sentiment in India

                  Buying property: Silly money or sound investment? - CNN.com

                  Saw the perception of bubble building up in India! Looks like most of the Indian visiters s of CNN site feels it is RE crash soon!

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                  • Re : Property Price Trends in Chennai

                    In Anna Nagar Railway Station, Canal works got over. There may be a Link Road will be constructed from Inner Ring Road(IRR) to Thirumangalam Road inbetween Anna Nagar Railway Station and Agathiyar Nagar.

                    This Link Road may be a 100 Feet Road, which starts between Padi Flyover and Anna Nagar West depot in IRR and ends in Thirumangalam Road.

                    If a road comes up here, Anna Nagar Railway Station can be easily accessed from IRR also. Now it has a entry and exit in Thirumangalam Road only.

                    So, train services may resume and more number of users use this train from Anna Nagar.

                    This road will greatly benefits the residents of surrounding area.

                    Also, there is a plan for connecting Anna Nagar Tower Metro Station with Anna Nagar Railway Station. This would benefit this area, which is already well developed and will increase the property prices also.

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                    • Re : Property Price Trends in Chennai

                      I dont want to start a controversy, but PBV was and is overpriced project. All this talk of no decent options around Porur is not right. Navins, Sidarth have good projects much before PBV. Osian Chlorophyll, SS Solitarie and Vijay's Ten square are very good options in terms of location. Also 1-2 projects in Manapakkam.

                      Yes, PBV is a much larger area than these, but this is only if you are ready to bear TLP scheme, extremely high extra costs, are ok with delay in getting corporation water/drainage (compared to Porur).

                      Being closer to Main road even if 5 kms away from a hotspot is a very subjective thing. Many still prefer being 1/2 km away from Main road but in a better location.

                      Also we still need to wait and see how PBV STP and other infra inside function, once so many families move in. There is a chance of chaos like Mantri.

                      About Land costs, I am sure PBV wont have bought it at 4K, they would have hardly spent 1.5 to 2 K when they bought it. So even then 4.4 K was a shocker for someone who has done nothing yet in Chennai, altho they quickly went to 4.8 K
                      Last edited July 18 2014, 12:01 AM.

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