Chennai, Feb 19, 2015
Chennai’s residential market will exhibit steady growth in 2015. Rents and capital values are forecast to remain stable during the year, according to property consultant Jones Lang LaSalle.
The ongoing construction of the second phase of the Outer Ring Road, linking the suburbs of Chennai from south to north, and the proposed peripheral ring road project are expected to improve the demand and capital values of the projects located in the far-off suburbs, said Jerry Kingsley, Local Director, Markets, JLL Chennai. The reduction in the base interest rate by 25 bps in January 2015 will cheer up the market and financial institutions are expected to pass on this reduction to customers and boost the housing demand, he said.
Chennai’s residential market is driven by end users constituting 75-80 per cent of buyers. This provides a strong foundation for a long-term investment in the city’s residential market as it reduces market volatility.
In the fourth quarter of 2014, Chennai witnessed the launch of 4,984 units compared to 4,175 in the previous quarter. The active vacancy in the market decreased to 56,900 units in Q4 from 57,111 in Q3.
Housing sales improved by 5.5 per cent in Q4 with 5,195 units sold compared with 4,924 in Q3. Participating in a panel discussion on “Aiding Real Estate growth in Chennai: The when and how of real estate market reversal”, Ajit Kumar Chordia, President, Credai Chennai, said a number of centres of excellence should be created in a 60-km radius. These small projects will spur real estate demand, he said.
T Chitti Baby, Chairman and CEO, Akshaya Homes, said a number of projects are on hold in the State due to change in norms for getting Environmental Assessment clearance.Two years ago, the clearance could be obtained before project completion. However, now it is necessary to get the clearance the project launch.