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Property Price Trends in Chennai

Last updated: 4 weeks ago
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  • Re : Property Price Trends in Chennai

    Originally posted by sh1729 View Post
    Boss, In all fairness, consider my predicament. I own 2 decent apts in Ashok Nagar and Virugambakkam. I am staying in Virugambakkam (where I have stayed for 10+ yrs) and rented out Ashok Nagar one. Both are pretty old > 20 yrs. Other house owners are opposing reconstruction of the apartements sighting awkward reasons -- Children in 10th , I am living on pension and can't afford even 20K to repaint the exterior.
    Also I work in ITES sector. My offices are in Shols and MCity. The travel kills me with sometimes 2-3 hrs one-way in case of traffic. There is no option available but to move into suburbs.
    I would like high-end houses available near these suburbs. I dont find good infrastructure even in CBD, the roads, water logging, electricity (load shedding) etc are not good in Virugambakkam as well .
    I ended up buying few plots near GST hoping for construction later on. My current experience in desperately trying for reconstruction of my old apts which has resulted futile has made me choose plot over flat or apts and independant house construction.
    Few issues I do foresee in living in suburbs is lack of renowned school. I am hoping the scenario would change in the time to come.
    I am chennaiite and like living in city, but for all practical reasons it does not make sense for me in the long run.
    This type of maintenance issues exist in all the small time apartments where 15-20 families live in a building..each falt owner has his/her own agenda for non co-operation...I have lived in one of such apartment almost 15 years of my life...thats why either the new branded apartments (where they suck maintenance via corpus funds and prepayment) or own houses built on plots are prefered for peace of mind...Who has time to explain the good reasons to maintain a Building...

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    • Re : Property Price Trends in Chennai

      Very old apts have different dynamics. Some residents will not want to move out. Old apts could have been built without approvals, and might have used up all FSI. Housing boards and other units have this issue, so that's why UDS in these units are not worth much.

      But nowadays, smaller apt complexes (10-15yrs) is not a big issue. I saw a big builder purchasing a whole apt complex and nearby houses. There is a luxury complex coming up in its place. Smaller complexes are always easier to redevelop. I know a couple of buildings who are doing redevelopment. One by a builder and one by residents themselves. Most of the residents in nice localities are good and understanding, so you might have issues with association in not-so good localities but not many in good areas. Lot of NRIs, people working in different cities, tenanted apts, means there are not much attachment like before. Everyone nowadays know JV, so people do not shut the door on it.

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      • Re : Property Price Trends in Chennai

        Originally posted by Love4land View Post
        However, due to longer period of development, city areas tend to have better schools, shops and hospitals. Even this is changing rapidly. Till a few years back, it was unthinkable to have schools like Vidya Mandir and PSBB starting branches in suburbs. People who moved to suburbs like Sholinganallur in 2006 were forced to enroll their kids in international schools like Gateway. They were paying much higher fee than what was charged by traditional good schools. Now Vidya Mandir is operating from Guduvancherry, Perungudi and Perumbakkam while PSBB has branches in Siruseri, Perumbakkam, Gerugambakkam and GST road.
        New schools in suburbs are facing big shortage off teachers and lot of issues despite having good new buildings and infrastructure. They have to increase the pay to get good teachers, that's not happening now.
        Remember in India, people still rely on coaching centers even students from city branches of DAV, PSBB, Vidya Mandir, etc.

        International school are good, no issues there. They are well staffed and have been running for sometime.

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        • Re : Property Price Trends in Chennai

          Best to avoid apartments with senior citizens, they want a stable life during their final years and will create issues during redevelopment due to uncertainties and relocation involved during construction period.

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          • Re : Property Price Trends in Chennai

            Originally posted by sh1729 View Post
            Boss, In all fairness, consider my predicament. I own 2 decent apts in Ashok Nagar and Virugambakkam. I am staying in Virugambakkam (where I have stayed for 10+ yrs) and rented out Ashok Nagar one. Both are pretty old > 20 yrs. Other house owners are opposing reconstruction of the apartements sighting awkward reasons -- Children in 10th , I am living on pension and can't afford even 20K to repaint the exterior.
            Also I work in ITES sector. My offices are in Shols and MCity. The travel kills me with sometimes 2-3 hrs one-way in case of traffic. There is no option available but to move into suburbs.
            I would like high-end houses available near these suburbs. I dont find good infrastructure even in CBD, the roads, water logging, electricity (load shedding) etc are not good in Virugambakkam as well .
            I ended up buying few plots near GST hoping for construction later on. My current experience in desperately trying for reconstruction of my old apts which has resulted futile has made me choose plot over flat or apts and independant house construction.
            Few issues I do foresee in living in suburbs is lack of renowned school. I am hoping the scenario would change in the time to come.
            I am chennaiite and like living in city, but for all practical reasons it does not make sense for me in the long run.
            If you work in suburbs as far as MWC, you should evaluate moving to suburbs. But there are some issues I see.

            Your kids will be in high school soon so this will be important.

            Price difference between Virugambakkam and Shols is not much. Virugambakkam is around 6K and Shols is 5K. You will not get a big flat even if you sell your old one.

            Monthly maintainance in burbs is a lot, 5K a month at least, primairly driven by water and power. So if you are having problems in paying 20K one time fee. This is an issue.

            Transport, do you have a car. Buses are not good in OMR, especially in the interiors.

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            • Re : Property Price Trends in Chennai

              Originally posted by Clairvoyant View Post
              Even I reckon UDS is bit overstated. It does serve purpose for end use (CBD) to some extent (patience is key), but there's big if- if you look at localities like Adyar, Alwarpet , Mylapore, Nungambakkam etc..most of the dwellers live for decades and appears more like retired homes.

              They have goldmine in hand but their PPP is low, as they would have inherited or living there for generation (acquired when it was cheap). So you do come across issues like building consensus for re-development, maintenance quibbles etc..

              I did look at an appartment (19 years old) in the heart of Nungambakkam in mid 2000s but had to walk out as I found better opportunity in plots. I don't have regret as return % is higher than flats.
              Just to add-on- Premium here is Time. How long are you ready to play waiting game? It can be any where between 10-30 years. Is it worth a wait ? it's individual choice and no one size fits all approach.

              Would I rather buy new appartment instead of re-sale (ex. on market for 12k/sq ft in CBD) where new build will be 15-20k/sq ft. It depends on individual preferences and any appreciation will be compensated by time and other ROIs.

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              • Re : Property Price Trends in Chennai

                As per the info received from Regn dept , Regn from 01.04.2012 to date are in steady steep declining form and from Aug to Sep, it is abysmally low across TN. Reason cited is that steep hike of 10-15 times of land value and TDS and PAN card linking for more than 30 lacs transaction keep the buyers/ sellers at bay. Much awaited correction bearable to the realistic land price level is expected in the months to come only to get stabilized for certain period before inching up further . For flats, Builders must slash the land cost to their original buying price rather than GV, since construction cost is uncontrollable one to keep the flats coming up with sales.

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                • Re : Property Price Trends in Chennai

                  On Friday - US Fed announced mother of all QE i.e QE3. This shall flood the market with US dollar. In Coming days you would see rupee appreciation and price appreciation of all real assets.

                  Comment


                  • Re : Property Price Trends in Chennai

                    I do not think there will be any increase in RE prices in the near future. It would stagnate for a year unless they drastically reduce interest rates, which we know is not going to happen. However I see a 25bps reduction by end of year.

                    Indian economy is in a slowdown along with other BRICS. Prices have also gone up a lot, especially in the suburbs.

                    Chennai market along with Banaglore, NCR and Mumbai has a lot of inventory. New projects have fallen down the cliff. PE money has dried up in most places. Lot of new land parcels are flooding the market, as cities are exapnding like crazy.

                    Even take Chennai Metro area as example, it was the 174 sqkm until 6-7 years ago. they expanded to 450sqkm-ish, then 1150sqkm-ish, now they are thinking 4000-9000, which is crazy. People will keep going farther and farther for investments even though they will live in the city.

                    Govt will try to increase revenue from stamp duties as pressure is grown to reduce VAT on fuel. There might be another Guideline Value revision by late 2013 or early 2014.

                    The effect of all of this is short term holding of Plots would get affected. You need to do all transactions in white because of the GV rates. If you sell under three years, short-term cap gain taxes with cess close to 32% applies. Reinvestment or infra bonds do not apply for short term, only long term can do that.
                    Holding three years will cost 35-40% interest cost and another 10% stamp duty with brokerage fees mean anything under 50% profit is a loss. 75-80% will mean moderate returns, double the cost means very good return.
                    Very few places have plots double in the price from 2009. So most investors are already trying to get out. I do not think price will double here on to 2015 with the current environment. An inflationary led return of 20-25% is possible however which is ok for cash investors.
                    It is hard to get buyers who will use colored component in suburbs, most resale buyers also need loans and will be white-only guys.

                    In my opinion, people should carefully evaluate before getting into expensive plots. Cash investors, it should be fine. Borrowing money from bank at 11-12% for plots does not make sense at this juncture unless you get a screaming deal.

                    Flats, people should should get into CLP (constuction linked payments) to reduce interest burden. Never give big downpayments for pre-launches. You should look at rental returns, 3-4% is needed especially in a flat market. Buy flats only where there is good infra or where there will be infra soon. Be ready for delays of atleast 1 year. Always think about resale aspects like carpark, location, view etc.

                    Comment


                    • Re : Property Price Trends in Chennai

                      It is ULTA otherwise . Enough FDI money chased Indian RE already and to make it prosperous with marketability , rates need to come down from Builders side to attract buyers as sign of interest rate cut with Inflation is far from the sight for next one year or two with toppling of present Govt soon

                      Originally posted by sunr2i View Post
                      On Friday - US Fed announced mother of all QE i.e QE3. This shall flood the market with US dollar. In Coming days you would see rupee appreciation and price appreciation of all real assets.

                      Comment

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