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Property Price Trends in Chennai

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

    Originally posted by Clairvoyant View Post
    Thanks K11 and VP. Will try to share what I'm aware of esp. in and around London which could be of help to others.

    London tube is designed in a way where everyarea within Zone 1-3 have tube (metro) station accessible within radius of 1-1.5 mile. It carries close to 3 million passengers a day. I would recommend you guys to visit www.tfl.gov.uk (transport for London website)- single source for all transport info (incl ferry, bus, tram, tube etc.. similar to unified metropolitan transport authority planned in Chennai. Prices shoots up moment there is a proposal to bring tube to any area (no different from us ) . So property prices are invariably linked to transport, but personally I believe building/widening roads never going to slove traffic woes.

    I used to frequent user on MRTS and loved it. I remember reading HK delegation were shocked suh prime RE lying vacant when they visited MRTS. I'm optimistic here turnaround won't take much time if only we have visionary team to manage it. London roads are as narrow as Chennai with intelligent traffic system and congestion zones it's managed admirably.

    I do agree unsless SG patronise metro/mono it's going to be white elephant, but i hope common sense prevails and it covers all area with CMDA (w-i-p in next 30 -50 years) .
    I am surprised to see link for tamil language in this UK website - www.tfl.gov.uk

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    • Re : Property Price Trends in Chennai

      Went back to my post and realised my folly ! I guess posting when half asleep is not a good time :-)

      Yes they obviously meant in India and not Chennai alone :-) No one who has listened to Vijaykanth's statistical dialog from Ramana can mistake in quoting TN population!

      But yday the link was not yet ready so cudnt post it!

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      • Re : Property Price Trends in Chennai

        Originally posted by vettipayyan View Post
        Went back to my post and realised my folly ! I guess posting when half asleep is not a good time :-)

        Yes they obviously meant in India and not Chennai alone :-) No one who has listened to Vijaykanth's statistical dialog from Ramana can mistake in quoting TN population!

        But yday the link was not yet ready so cudnt post it!
        No probs, we do not mind, you got the information out fast.

        Thats is more important and helpful.

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        • Re : Property Price Trends in Chennai

          I just checked GRN builders website and following are their apartment rates:

          Thoraipakkam - 5000 psf
          Adambakkam - 5000 psf
          Selaiyur (East Tambaram) - 5500 psf
          Nanganallur - 6000 psf
          Madipakkam - 7000 psf

          They seem to stick to standard pricing for given locality.

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          • Re : Property Price Trends in Chennai

            GRN pricing in Chennai city areas:

            KK Nagar - 9000 psf
            Thiruvanmiyur - 10500 psf
            Mylapore - 12000 psf
            T.Nagar - 12000 psf

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            • Re : Property Price Trends in Chennai

              Nice to see information on London Metro (tube/underground whatever it is called), but let us not forget that the work on what is London's Metro/UG started in 1860/70s.. we are 140 years behind the best cities of world. But still there is hope.

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              • Re : Property Price Trends in Chennai

                Here are my views.

                Like your reply, I like a good debate.
                My views could be bit harsh, I hope you do not mind.

                Originally posted by murugesh View Post
                1. Big developers buy large tracts of land at far off places, and encash by developing when required infra comes in. It's still happening. What's wrong in a middle class fellow investing in Land for the rainy day?
                Big Developers cannot hold out land for long periods of time. Most of the big ones are public and shareholder do not like them taking so much risks. DLF is a big exception, well known hoarder but that was long time ago, they are in liquidation mode.

                But S Indian developers are known for getting projects quickly online. The approval process takes time, but overall I have never seen big parcels of land lying vacant. Remember they borrow at 15% or more sometimes. Also they do not get funding 100% of the value. The banks will give 50-60% of the value for developers too. They have to tie with PE or external sources which would never want to see them hoarding land.

                The whole chain, Developer - PE funds/short term investors/Financial Inst like to make quick money.

                Originally posted by murugesh View Post
                3. I dont think middle class folks, in particular, buy land as investment. Its likely that they are unable to build a house they want to build. Additional taxes will only make it more difficult. Yep you talk about return of 12%, like thats going to happen across the counter, knowing how things work in a govt office. Unlike other forms of investment, housing is a social responsible sector. Mad taxing should be abhorred. What's being charged already is heavy. What social security does our govts offer today?!
                Middle class people are contributing a lot in this land hoarding. Layout development business is booming because of them. Have you seen TV ads for Land investments lately?
                This forum itself is a good example. See how many folks inclduing NRIs have bought land in god forsaken places and not building anything on it (hoarding). If the land went to a developer he would have atleast built something.

                How many layouts have you seen promoting land parcels of 5 crores or more? - ZERO
                All of these layouts are designed for middle class people and NRIs. Most of them are at 20L or less, which affects lower middle class person a lot than an upper middle class person.
                No industrialist or business man will buy in hopes of building a large home in a half ground plot among these layouts, they will rather put the money in their business and make more returns.

                Of course, most cheating also happens because this section of society are the most gullible (lower middle class & NRI). We ourselves are responsible for irrational pricing, the other partys do try to make a quick buck.


                Originally posted by murugesh View Post
                2. a) Like Einstein said, the only thing humans can never understand is taxes, or something like that. Taxes need some justification, Govts shouldn't tax just because they can. When I pay Stamp duty and reg. charges, that's supposed to help the govt in developing the required infra in that region, even though they dont! With the extra money you suggest, there is not even a pretense of a justification.

                b) Increasing such stamp duty and charges, will only lead to black money.

                c) There is no nationwide uniformity in stamp duty/reg charges. In some states the registered value is just 1/10th of the actual transaction. Tamil nadu is perhaps the most compliant and best regulated. Should we suffer on account of being good citizens?!
                Increasing stamp duty will lead to black money - agreed.
                But increasing guideline value will make sure the deal has more 'White'%.

                After govt increased guideline value (now it is 2007) most transactions are happening cleanly, there is no reg happening under GV. I hear that GV is adequate now and close to market value. Even if is 75% of MV then that means 75% white deal is min. If it is way off, they should revise again an increase it. They can do this once a year or once in 2 yrs.

                Land owners, hoarders, speculators should pay more money (taxes).
                Lets say, 90% of Chennai population do not own land, then why should they contribute their tax money to put road and development near your property. If the govt develops the area with public money, you profit from it, not the rest of the public.

                Stamp Duty should not be same for flats/houses in city and vacant land in outskirts. There should be an substantial increase in stamp duty and property tax for vacant land. If I was CM, I will even impose these on day one.

                Home ownership should be encouraged, residential land ownership should be discouraged.

                Hoarding of land is the biggest contributor for price rise in suburbs.
                It does not make sense to punish genuine home buyers and reward speculators.


                PS - Even I am also a speculator as others in this forum, who got benefited.
                Last edited August 27 2012, 09:04 PM.

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                • Re : Property Price Trends in Chennai

                  Reg township projects in areas to be served by metro, the metro line is coming up in already heavily populated areas so large parcels of land may not be available.

                  But as i keep saying, many of us are interested in RE as an investment option. There are plenty of second hand, old flats (with no carparking) etc in those places which will have Metro stations. Such units are good way to bet on metro as a factor in influencing RE prices. Right now some of places where metro stations are to come up are significantly cheaper than some fancy places in Core Chennai City. This should change eventually.

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                  • Re : Property Price Trends in Chennai

                    Regarding the vacant land tax/hoarding land debate :

                    I would like to disagree with k11. Nowadays, middle class is favourite whipping boy/scapegoat for all folks. But point is the biggest owners of vacant land in absolute terms are 1) Government and govt bodies themselves 2) Lot of industrial units. I keep hearing that Amalgamations group in chennai owns lot of unoccupied land.

                    Will vacant land tax solve anything? Think from point of view of someone who invested in a plot in say guduvanchery for 50L. He is a middle class guy, so he would be getting say 50K or 60K pm tax free. Currently the cost of construction is Rs 1600 per sqft . So to erect a decent house with FSI of 1.5, the owner of plot must plough 60L to build a residential unit. For most Middle class people, this is too much of a money. So the culprit is the cost of construction being very high relative to incomes.

                    Suppose a law is brought to tax vacant land at say 3% of land value p.a. Immediately we will find everyone scramble to build something the result is cost of construction will skyrocket. Government wont be able to even build essential infrastructure and every construction commodity will be hoarded. And most importantly, govt as owner of vacant land itself will lose lot of money, RE market will plunge and government revenues from registration will drop. And people will erect temporary huts and skirt the law.

                    So vacant land tax wont work in developing country like India. What else can be done?

                    One problem in India, is unlike in Western nations, inflation is very high. At same time there is no meaningful social security and no job security except govt sector. A middle class family out of job can within 5-10 years go to slums, unless they own hard assets. Gold and property investment is popular because they are only really inflation proof investments available to Indians. For a middle class person buying plot in a distant suburb it is not just a hoarding exercise, it is a social security scheme for his family in a distant future. Also taxation laws in india punish those investing in financial assets while doing nothing about those investing in hard assets. All these make investing in plots the only avenue left. We should reflect on all these and think how things can be changed . And that will all take lot of time.

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                    • Re : Property Price Trends in Chennai

                      Originally posted by k11 View Post
                      But S Indian developers are known for getting projects quickly online. The approval process takes time, but overall I have never seen big parcels of land lying vacant. Remember they borrow at 15% or more sometimes. Also they do not get funding 100% of the value. The banks will give 50-60% of the value for developers too. They have to tie with PE or external sources which would never want to see them hoarding land.
                      This is only applicable to builders who buy land in established areas for exorbitant rates, not applicable for builders buying land in far flung areas for throwaway prices and wait for several years until area develops.

                      Hira purchased Oragadam land from Triveni academy for dead cheap rate long before anyone knew it would become an industrial area.

                      According to Sobha investor presentation, the average amount they spend on land purchase is Rs.100 psf.

                      They have hundreds of acres of vacant land in Tambaram and Sriperumbudur
                      purchased long back.

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