Future of Real Estate in Chennai
Real estate is classified into residential, commercial, retail and hospitality. In Chennai, there is going to be demand for all four divisions of real estate in the foreseeable future. Chennai is a growing metropolitan and there is going to be a constant inflow of people into the city. This, in turn, is going to create a huge demand. This is evidently seen in the rising purchase on luxury apartments in Chennai.
Take a look at the key points listed below:
#1. Influence of IT in commercial and residential real estate:
Chennai real estate has and will flourish because of the growth in IT, urbanization and affordable housing. The increase in demand resulted in an increase in supply. Many separate parts of real estate are prospering in Chennai due to the high demand. As soon as Chennai became an IT-town, it drove the commercial real estate sector. Tidel Park in Tharamani and Olympia tech park in Guindy occupy over 15 lakh sq ft and 13 lakh sq ft respectively. There are several other similar tech parks in Chennai. If there is a tech park then there are a number of offices and office infrastructure that are to be built. Growth in IT results in huge cash inflow and an increase in income. This, in turn, serves as an impetus for people to buy residential properties. This, along with other factors such as the policies by the government. The government made several tax subsidies that helped first-time homebuyers. The PMAY (housing for all within 2022) provides a credit-linked subsidy scheme for homebuyers.
#2. Investment due to development:
Chennai is attracting a lot of foreign investment because of its growth in real estate. Apart from Chennai being among the top cities in India, the reason for NRI investment is the rental returns in Chennai. Many people from other cities come to Chennai for higher education and work. They do not want to purchase a home here, so, they rent one. The other reason for the NRI investment would be high Appreciation in Chennai. If you are going to invest in a property in Chennai with a reliable promoter within the city or the suburbs of areas with good connectivity, it is likely to appreciate within a few years itself.
#3. Retail real estate growth
T.Nagar and Anna Nagar are not the only retail centers in Chennai anymore. Quality retail spaces are starting to grow in residential areas. The metro rail connectivity is also among the reasons for the growth of retail real estate in Chennai. The mall footprint in Chennai has increased twice as much within a year. 2018-2019 alone there were 7 malls that were completed in Chennai. VR mall in Chennai in Anna Nagar opened in June 2018. It has occupied over 2 million sq. ft. and has a plethora of brands (including American) and several F&B options. There is also a substantial increase in the F&B operations in Chennai. Each prominent F&B brand has at least 10 outlets in various parts of the city. Food streets in ECR and Rajiv Gandhi Salai would be great examples for the increase in the number of F&B outlets in Chennai.
Chennai real estate is going to grow and thrive because of the following reasons (pertaining to the housing sector):
#4. Strong demand
This strong demand in real estate in Chennai is because of the increased number of people within the city. There are umpteen job opportunities in Chennai, not only in IT but also in the manufacturing field. Many surveys revealed that Chennai is the most secure place to live in the country. Among the 10 million people living in Chennai, nearly 10 % of the population comes from other parts of the country. This feeds to the demand for real estate in Chennai. OMR and ECR are two major players in the current real estate scenario. Due to this reason, South Chennai has become a prime hub for residential real estate. The impressive infrastructural growth and excellent connectivity make it the best place for buying apartments.
#5. Attractive opportunities
Chennai has many attractive options when it comes to residential real estate. The all-inclusive nature of the community apartment is one of the reasons for the growth in the housing sector. Having all the necessary amenities in a single place is the concept that drove growth. Another important factor is the introduction of affordable housing in Chennai.
#6. Policy support
The two policies that really made a difference are the RERA and PMAY. The introduction of RERA (Real estate regulation act) in 2016 broke the stigma associated with real estate. It brought transparency and protected buyer-interests. PMAY (Pradhan Mantri Awas Yojana), with the aim to provide housing for all, offered various benefits for first time home buyers. This made the middle-class population buy homes.
#7. Increasing rental
As mentioned earlier, Chennai is not only a town for IT but also flourishes in the manufacturing and industrial sector. Chennai also has some of the most prestigious education centers in India. Chennai has the 3rd largest population in the country after Mumbai and Delhi and has the highest number of migrants. 62% of the migrants are from other parts of the state and 34% are from other parts of the country. These people are the major contributors, that help to multiply the rental real estate.
#8. The rapid gain in the momentum of suburban areas in Chennai
The city is expanding. This happens due to a lack of space, increased population, urbanization, etc. The real estate in the suburbs of Chennai is gaining momentum because of the increased infrastructure by the government that brought about great connectivity. There are many flats for sale in Porur, Poonamallee, and Medavakkam as these places are some of the areas that are going to become the prime hubs of Chennai.
It is evident that there is only going to be more progress in the Chennai real estate market in the future. If you are looking to buy in Chennai, this is a perfect time. Don’t know what to choose? Talk to us today to discuss the available options.