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Property Price Trends in Chennai

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

    Yes, it is not exactly accurate but most investors will not care about extra 500 or 1000rs.

    The topic is who will hit the 10K barrier (or bigger numbers) first.

    Going from 4.5K to 5K or 6K is fine. But does it have legs to get to bigger gains.

    As many of you know, I am spoilt by big gains, so I do not care about the paltry 10 or 15% gain that has already happened in last 1 year.

    Can the buyer double the money in the next three years is the question.

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    • Re : Property Price Trends in Chennai

      Originally posted by k11 View Post
      Can the buyer double the money in the next three years is the question.
      I wish I know the answer

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      • Re : Property Price Trends in Chennai

        Originally posted by k11 View Post
        Yes, it is not exactly accurate but most investors will not care about extra 500 or 1000rs.


        Can the buyer double the money in the next three years is the question.
        k11 should go back and read many previous posts (since 2008) in this thread and this forum.

        Rewind.

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        • Re : Property Price Trends in Chennai

          Originally posted by Economist View Post
          k11 should go back and read many previous posts (since 2008) in this thread and this forum.

          Rewind.
          Yes, I read many comments in this thread from forum members, mostly bearish back in 09-10 when I was in the market.

          I ignored many comments and bought in 2010.
          My place has nearly doubled on paper.

          I will back in the market prob next year, or so if there is a slowdown.

          I feel Chennai market is still cheap compared to other parts of country.

          Are you a bull or a bear today?

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          • Re : Property Price Trends in Chennai

            In this thread, there was someone comparing GST and OMR and asking which would appreciate better. I would like to share some views on that:

            GST had developed much much earlier than OMR and is advantaged by the existence of a wonderful suburban railway track which will further be extended till Chengulpet.

            However, transportation alone does not decide RE prices. In Chennai, water is an important factor to consider when investing in RE.

            Much of Chennai depends on ground water for residential consumption. The problem in GST is in large areas, the soil is rocky and even digging wells require dynamite. The exception is places close to lakes (like Thiruneermalai, parts of Pallavaram ) etc. Whereas, OMR does not have this problem. Add to it the Pallikaranai marsh which recharges ground water. Of course, water is salty and unfit for drinking but with cheap RO units, that is no longer an issue.

            Unlike GST areas, much of OMR is brought now into City Corporation. A new desalination plant is coming up at Nemmeli and so some sort of metro water supply (at high price) will get guaranteed for the newly built flats in OMR at some point of time.

            All this gives some edge to OMR that is otherwise disadvantaged by lack of rail transport.

            On balance, GST is not bad but not all GST will develop, it will be pockets (Pammal/Pallavaram), Mudichur, Guduvanchery, M-City around areas etc. OMR will thrive till Siruseri/Padur.

            PS - I believe given proximity to Airport, Pallavaram zone can host lots and lots of hotels. But I believe investors are wary because they see some sort of new International Airport coming up in next 15 years and eventual closure of meenambakkam airport. So that is one reason why Pallavaram is bit undervalued .

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            • Re : Property Price Trends in Chennai

              Originally posted by k11 View Post
              I feel Chennai market is still cheap compared to other parts of country.

              Are you a bull or a bear today?
              Good question..

              IMHO - Chennai is much much cheaper than Mumbai and NCR. But I think BLR and HYD are also cheaper. Large areas of Chennai lack the right kind of social and civic infrastructure that suburban BLR/HYD possess..

              Unlike other metros, I think the extent of speculative investment/outsider investment in Chennai is very limited.

              Overall I believe that the kind of appreciation btw 2009 and 2012 in Chennai wont happen in next 5 years.

              Chennai CBD(Mylapore, Nungambakkam, TNagar Adyar etc) will appreciate only slightly, i feel it is richly valued unless outsiders start investing big way..

              Newly added areas to Chennai corporation are ones to bet on - esp those places which will soon get sewerage, metro water connection, good roads and a few malls.

              Generally, OMR is richly priced. So is GST.

              North east Chennai is underpriced but will remain so due to other social factors.

              North West Chennai (Ambattur zone), Mogappair , Porur, Maduravoyal, Mount - Pooonamalle belt , Madipakkam are likely go up most .

              In Old Corporation limits, Velachery prices should converge with Adyar in next 5 years.

              Apart from that, all places close to Metro Rail stations (ashok nagar, alandur etc) should appreciate lot, since govt may relax on FSI in such places.

              Fair to say that 50-100% appreciation in 5 years possible in all above mentioned places (in above 3 lines) . Rest wont go up much. What do others think?
              Last edited August 19 2012, 11:03 AM.

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              • Re : Property Price Trends in Chennai

                Originally posted by ramki830 View Post
                Large areas of Chennai lack the right kind of social and civic infrastructure that suburban BLR/HYD possess..
                This is the reason why I say prices in well established neighborhoods can go up even more.

                There are still parts of CBD where prices are cheap. I see most of CBD to be at 15-20K in the next 3 yrs.

                New areas are crappier and there will always be lack of basic and social infrastructure. If you have the money, for end use suburbs are not a good choice. Suburbs are when your budget is tight.

                By the way, I agree your views on West suburbs having more potential but that will be quite some time.

                I do not agree Velachery getting equal to Adyar.
                I see Adyar moving up to 15-16K by 2014.
                It will take some time for Velachery to cross 10K. Velachery is still outskirt of the city lacking basic facilities and has very less number of luxury housing options.

                I also do not agree on Airport and nearby areas in Pallavaram.
                In western countries, living near the airport is not preferred and has the lowest rentals/price. Higher noise pollution as the air traffic increases. Sometimes places near airport will have slums/low end housing.
                I do not see rich people especially NRI flocking to live near airport.

                Same goes with Metro rail, its adoption is a big unknown. We do not know yet how much Metro will add to the RE landscape. I would say staying near a busy metro interchange will be bad for high end housing. I will never build a multi-crore property near a metro. Metro can be 1-2Km away but not right next door. The places will turn very congested with traffic, noise (metros do not have rubber wheels) and people using commercial establishments. Why not buy near Central instead of Alandur. It is even more crappier (low priced) and probably will be the most popular metro station.

                Comment


                • Re : Property Price Trends in Chennai

                  k11,



                  Reg Velachery, I think you are underestimating its potential. Velachery was 500 Rs psqft in 1995, when city (alwarpet) was 1200 Rs psqft. Now it has gone to nearly 8K + .. Velachery is having McDonalds and so many restaurants and getting more than one mall,something Adyar lacks. So prices will converge faster but I agree that not all places in Velachery will do well (interior regions will continue to be priced less).

                  And w.r.t Airport as i said we really dont know what will happen to this airport in next 15 years. In anycase dont see places near airport becoming richly priced due to other reasons i said (water etc). And lastly on metro, adoption is an issue, but dont think noise is so much a factor. Even now I find people residing in busiest streets of TNagar and refusing to sell/move out, taking adv of very high prices , even as they curse everyone who make noise (from the hawkers to the parking vehicles to the big retailers). Unlike in west, zoning laws wont be brought and it wont work , given that most of our population is not car owning/driving.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by ramki830 View Post
                    Much of Chennai depends on ground water for residential consumption. The problem in GST is in large areas, the soil is rocky and even digging wells require dynamite.
                    Yes, ground water is an issue in most places due to rocky terrain, water replenishes fast and dries up fast.

                    OMR has a great water table thanks to pallikaranai acquifer recharge zone. Areas closer to Buckingham canal suffer from salt water intrusion though.

                    Pallavaram will appreciate due to proximity to airport, not because the area looks great but because of various infrastructure projects. The government will eventually improve connectivity to airport and the benefit will trickle down to Pallavaram and Alandur.

                    We cannot under-estimate potential of Metro, in Singapore there is considerable premium for properties closer to Metro, even luxury ones. The story repeated in Delhi and I'm sure will repeat in Chennai.

                    We often see even high end projects advertised as being closer to bus stop. This is because areas closer to bus stop or railway station attract retailers, be it big or small. Ranganathan street is living example.

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                    • Re : Property Price Trends in Chennai

                      Originally posted by k11 View Post
                      I also do not agree on Airport and nearby areas in Pallavaram.In western countries, living near the airport is not preferred and has the lowest rentals/price. Higher noise pollution as the air traffic increases. Sometimes places near airport will have slums/low end housing.
                      I do not see rich people especially NRI flocking to live near airport.

                      All NRI needs is a good apartment project. Living near airport means living close to a Metro station and having good connectivity to rest of Chennai.

                      In 2003, I could afford an apartment in Thiruvanmiyur, in 2006 I would have settled down in a huge apartment in Medavakkam, in 2012 I would have settled down in huge apartment in Pallavaram. It all depends on timing, a rich NRI who could afford a house in Bishop Garden in 2003 may have to settle down for Pallavaram if he miss the opportunity.

                      It is not like 2006 when Jain Green Acres was only option. Nowadays there are wide variety of choices in GST, it is not that bad after all. For someone who didn't grow up in Chennai, it makes no difference staying in Pallavaram vs staying in Velachery as long as all his requirements are met.

                      Same goes with Metro rail, its adoption is a big unknown. We do not know yet how much Metro will add to the RE landscape. I would say staying near a busy metro interchange will be bad for high end housing. I will never build a multi-crore property near a metro. Metro can be 1-2Km away but not right next door. The places will turn very congested with traffic, noise (metros do not have rubber wheels) and people using commercial establishments. Why not buy near Central instead of Alandur. It is even more crappier (low priced) and probably will be the most popular metro station.
                      There is always a premium for being near a Metro station. Noise is not an issue, staying close to a station is different from staying close to track. We are discussing about properties within radius of 1 KM from station.
                      Last edited August 19 2012, 02:01 PM.

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