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Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

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Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

Last updated: March 16 2013
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  • Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

    As the title says, are the suburbs getting too expensive. How would you compare on value basis to the rest of the country.

    Regular run of the mill projects have touched 1C or getting very close to that. Too many NRIs and investors have poured money into them without thinking of end use and getting rentals as sole objective. Empty layouts on narrow roads without a house in sight are starting to command crazy high prices. Lately, I am also questioning the demand. Healthy demand exists for sub 50L 2-bhks. But builders are copying the city model and developing 3-bhks and are ignoring the bread and butter entry level 2bhks.

    Looking deeply at middle class budgets, people have a hard time streching at lower ends. 50L budget will have a hard time streching to 75L. But for someone at 1C budget, it might be easier to extend to 1.25-1.5C.
    So it has become easier for someone buying a 1C apt in Medavakkam or Perumbakkam to extend his budget to Velachery by paying 20-30% extra. Same scenario in project like Prestige, why not get into KK Nagar which is not far off when you get into raw numbers.

    When it comes to extended suburbs, there is still a big gap. But it will take way longer time for Oragadam or Thiruporur to get to big prices. Luxury townships and landmark projects might show an exception. Actually even Hira lagged with its Palace gardens. But lets focus on run of the mill projects.

    So have you guys considered suburbs of other cities as an alternative choice.

    Chennai city has done very well in recent years than rest of the country. Suburbs have also showed decent returns but are we wearing orange (or yellow) colored glasses when we look at properties.

    Looking at NCR, Noida looks good. For some reason, I have been hesitant to get in there. Gurgaon can def support high prices. It is one place, where a lot of buying power exists and is the best place to get into high end projects. Buying and selling easiest in the country.

    In the south, Blore is a no go for me, subpar performance in recent years.
    Kochi is too crowded with NRI money, though some nice projects coming up like the DLF one. Hyderabad looks good, locations near Hi-Tech city are real VFM for an enduser. Best suburbs in South. Vizag might be pick of the lot. Still very good prices, not yet tapped by big developers, but that also means lesser ways to put money in, land might be an option.

    Navi Mumbai does not attract me, but might have good potential in long term. Kolkata looks very attractive from some of my dicussion from a friend but the region is unknown to me, though I have a couple of family members in that region.

    I am starting this thread for us to dicuss other properties/areas at good prices outside the Chennai region. I am sure there are lot more places that we are not looking into. A lot of people might be interested to hear.
  • #2

    #2

    Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

    Originally posted by k11 View Post
    lately, i am also questioning the demand. Healthy demand exists for sub 50l 2-bhks. But builders are copying the city model and developing 3-bhks and are ignoring the bread and butter entry level 2bhks.
    +100 !!!!!!!!!!!

    Comment

    • #3

      #3

      Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

      Originally posted by k11 View Post

      I am starting this thread for us to dicuss other properties/areas at good prices outside the Chennai region. I am sure there are lot more places that we are not looking into. A lot of people might be interested to hear.
      K11/Others, a question...

      How does Chennai RE compare with other big towns in TamilNadu ?

      Given Chennai's natural advantages plus policy based advantages (lesser power cut, metro rail etc etc), other towns in TN should be much cheaper in RE. A suburb in CMDA should be valued higher than in core CBD areas of a district HQ in TN. Is that the case now?

      I dont have ready data but from little i hear, RE is quite high in many small towns. Any views?

      Comment

      • #4

        #4

        Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

        At least I don't think suburbs in Chennai are more expensive then rest of India.

        First of all, if a place is a suburb, it does not mean it should have only budget projects. A suburb can have all types of projects to suit all budgets.

        Again 'suburb' is a very ambiguous term since most of of white collar jobs are now in suburbs whether in Bangalore or Chennai.

        Some or few projects located in a 'suburb' will be high budget, because there will be demand for such projects. Within the same suburb their will be many normal budget projects also.

        In Bangalore, in Whitefield there are projects ranging from Rs.35 Lac flats to Rs.10 crore Villas. 60% of projects in Whitefield are in normal budgets. Surprisingly the hot properties which get sold out in Whitefield are all very high end villas which cost Rs. 3 crore onwards. So even in a so call 'suburb' Whitefield its the big budget projects which get sold out fast.

        Question is who lives in these villas in Whitefield. Expatriates - for example in Palm Meadows villas mainly Europeans and American expatriates live - almost all of them are stationed in MNC IT companies in Bangalore like SAP, Dell, Accenture etc. etc. When I speak to some of these expatriates living in Bangalore and stationed as Presidents, COOs etc in various mainly IT MNCs in Bangalore, during lunch or dinner meetings they saw they prefer Whitefield over living inside Bangalore city - since its well connected to their offices, star hotels and airport.
        Last edited March 3 2013, 04:54 PM.

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        • #5

          #5

          Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

          Originally posted by ramki830 View Post
          K11/Others, a question...

          How does Chennai RE compare with other big towns in TamilNadu ?

          Given Chennai's natural advantages plus policy based advantages (lesser power cut, metro rail etc etc), other towns in TN should be much cheaper in RE. A suburb in CMDA should be valued higher than in core CBD areas of a district HQ in TN. Is that the case now?

          I dont have ready data but from little i hear, RE is quite high in many small towns. Any views?
          CDB areas of say Coimbatore and Trichy are costlier than suburbs in Chennai. I know few apartment projects in these cities where the prices are 7000rs per SQFT and up.

          Comment

          • #6

            #6

            Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

            You guys have no idea on prices in the suburbs of Mumbai. Prices on my street are close ot 28k close to airport. Chennai is way better off then mumbai. The TN native Chidambaram will ensure inflation stays at 15% for the next 10 years. One can only imagine the prices then. The next thing to happen will be apartments will get smaller. Its happening in Pune and Bangalore. Can't see why it will not happen in Chennai
            Last edited March 3 2013, 09:39 PM.

            Comment

            • #7

              #7

              Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

              Originally posted by ramki830 View Post
              K11/Others, a question...

              How does Chennai RE compare with other big towns in TamilNadu ?
              I do not have a good understanding about rest of TN. I am not from TN and I have not visited TN outside of Pondicherry and Ooty.But I have heard high prices in Comibatore, as Redblue says.

              @trk2012,
              I think you are confusing ticket size and price per sqft.
              In Chennai, there is Neelankarai, where many high ticket priced houses do exist.

              @rameshyahoo,
              Mumbai suburbs are high but they were developed long time ago, but we can compare exteneded suburbs to Chennai suburbs.
              What do you think of Navi Mumbai, like Panvel and compare it with OMR or Porur. I assume most of Navi Mumbai is not priced high, 5-10K and still within the reach of a middle class person.

              Comment

              • #8

                #8

                Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

                Is Chennai Suburbs getting expensive vs rest of the country?

                Apartment in Chennai's suburb does not offer enough value for the cost paid. One of my friend's mid-end apartment (1100 sqft,5 years old, 50% uds)in padikuppam road(not padikuppam) Annanagar went for 6000/sqft in resale and he is not able to buy a decent 3 bedroom apartment in suburbs for less than 90 lakhs(around 1500 sqft). A 1100 sqft 2 bhk apartment from builders like navins cost 60+ lakhs in Medavakkam.

                Padikuppam road might not be comparable to poshest areas of Annanagar, but it's a locality with all basic infrastructure in place and I am not able to accept that Medavakkam is just 5 years behind it.

                I would bet hyderabad as the better destination for RE investments among metros. Trichy and Salem are other places that seem promising in tier 2 cities.

                Comment

                • #9

                  #9

                  Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

                  After reading all the preceding comments you will notice that Chennai suburbs are not really costly. Infact the Whitefield answer is the most appropriate and I know it personally living another 10 km closer to the city of BLR than Whitefield yet that is the game.
                  I only have a question. Why do folks like you suddenly attack an area, you call it Chennai suburbs? Are you the writer for a Master who wants to amass land in the suburbs after selling sky high in the city? Why are you so bearish just about suburbs? What is the logic that price in Boat Club right on top of the smelly Adayar river is 33K psft while you flinch about the price in say Vandalur which probably moved from 2kpsft to 3kpsft. In Boat club the price last year was probably 20K.
                  Why dont you see that Chennai is filled with the entire TN working class and also many others across India. If the price in Chennai is not jacked up then where do you expect it to move up. The taxi driver who moved in from a village near Tuticorin will try to buy land in Guduvancheri not in Boat Club. So he will jack up the price there. Boat Club moves up because of the one purchase, as there are hardly any buyers there. In Guduvancheri or Nemillicherry there are bunch of buyers and sellers. So it is a more stable market.
                  Next time I hope the bears just vanish from this board. They are just confusing the poor investor who missed the bus in 2008 and is gonna miss the 2013 bus also. Did anyone think that a ground in Saligramam will cost a minimum 2C today in 2006 when it was a maximum 60L. Did the man who came to buy my land in Urapakkam in 2006 know that it will shoot 5 times in next 6 years? If he did he would not have argued about the price difference of 25K to put it right he wanted it at 17.75L and I wanted 18L. Today I will get 90L without a word and I want 1.25C.
                  Just dont miss the moving bus. The later bus will be more crowded.
                  Cheers.

                  Originally posted by k11 View Post
                  As the title says, are the suburbs getting too expensive. How would you compare on value basis to the rest of the country.

                  Regular run of the mill projects have touched 1C or getting very close to that. Too many NRIs and investors have poured money into them without thinking of end use and getting rentals as sole objective. Empty layouts on narrow roads without a house in sight are starting to command crazy high prices. Lately, I am also questioning the demand. Healthy demand exists for sub 50L 2-bhks. But builders are copying the city model and developing 3-bhks and are ignoring the bread and butter entry level 2bhks.

                  Looking deeply at middle class budgets, people have a hard time streching at lower ends. 50L budget will have a hard time streching to 75L. But for someone at 1C budget, it might be easier to extend to 1.25-1.5C.
                  So it has become easier for someone buying a 1C apt in Medavakkam or Perumbakkam to extend his budget to Velachery by paying 20-30% extra. Same scenario in project like Prestige, why not get into KK Nagar which is not far off when you get into raw numbers.

                  When it comes to extended suburbs, there is still a big gap. But it will take way longer time for Oragadam or Thiruporur to get to big prices. Luxury townships and landmark projects might show an exception. Actually even Hira lagged with its Palace gardens. But lets focus on run of the mill projects.

                  So have you guys considered suburbs of other cities as an alternative choice.

                  Chennai city has done very well in recent years than rest of the country. Suburbs have also showed decent returns but are we wearing orange (or yellow) colored glasses when we look at properties.

                  Looking at NCR, Noida looks good. For some reason, I have been hesitant to get in there. Gurgaon can def support high prices. It is one place, where a lot of buying power exists and is the best place to get into high end projects. Buying and selling easiest in the country.

                  In the south, Blore is a no go for me, subpar performance in recent years.
                  Kochi is too crowded with NRI money, though some nice projects coming up like the DLF one. Hyderabad looks good, locations near Hi-Tech city are real VFM for an enduser. Best suburbs in South. Vizag might be pick of the lot. Still very good prices, not yet tapped by big developers, but that also means lesser ways to put money in, land might be an option.

                  Navi Mumbai does not attract me, but might have good potential in long term. Kolkata looks very attractive from some of my dicussion from a friend but the region is unknown to me, though I have a couple of family members in that region.

                  I am starting this thread for us to dicuss other properties/areas at good prices outside the Chennai region. I am sure there are lot more places that we are not looking into. A lot of people might be interested to hear.

                  Comment

                  • #10

                    #10

                    Re : Is Chennai Suburbs Getting Expensive Vs Rest Of The Country?

                    Outskirts like Thane 5 years ago are between 8k and 10k. Thane is not within the Mumbai municipal limits. All extended suburbs are 5k and upwards. The middle-class has been shifted out of the city to these extended suburbs. In Chennai on OMR you can still get land cheap. Imagine an IT professional earning above average salary moving to Chennai or Mumbai. In Mumbai he will be forced to move to Kalyan to buy a 1000 sq ft apartment. In Chennai he can live close to GST for Mahindra World city or on OMR for all the tech companies. No wonder Tatas chose Chennai for their huge campus on OMR.

                    Comment

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