Wednesday, January 22, 2014

Housing sales dropped by 33% in Chennai

This is Ashok from Chennai. Of course, I started this blog to share the latest news about real estate in Chennai only. Chennai is one of the major cities in India which emerging in Information Technology, Medical, Manufactures and also Real Estate. Many builders and real estate developers are popular in Chennai. They started to focus on areas such as Poonamalle, Porur, Velachery, Medvakkam, Tamabaram, IT corridor(OMR), East Coast Road, etc. These are the main areas which all real estate promoters are eyeing on. Nowadays the land value in these areas has been soared. People are started to invest in these areas. Real estate promoters are started luxury apartments projects and delivering it to their valuable customers. Though the shortage of sand, the field held on for few months and now resumed as they are using ash bricks which will not needed much curing. They are developing 1BHK flat from 5BHK flat at maximum. Most developing flats are 2BHK and 3BHK flats.

Housing sales in Chennai dropped by 33%in 2013 due to slowdown in realty market in high interest rates according to a report by property consultant Knight Frank. Housing prices in the city increased by 5-7 per cent last year despite a decline in sales volume as developers restricted supply by offering fewer homes in the market. Sales volume has dipped in 2013 resulting in a fall of 33 per cent. The latest quarter, that is October-December 2013, has been one of the worst quarters in terms of sales and has recorded its lowest volume since 2008-09," the Knight Frank report said.

Factors such as slowing economic growth, rising interest rates by banks, high inflation and the weak rupee among others have contributed towards building a negative sentiment among home buyers, it said. Poor sentiment among home buyers has resulted in a decelerating trend in terms of sales over last four quarters. However, developers in Chennai have been smart enough to take cognizance of such a trend and have cautiously reduced the number of new launches in the preceding 12 months," it said. 

Need of Low Value Homes Increased in Chennai

               Nowadays, builders have started to build homes at low cost with fewer square feet’s rather than luxury homes and flats in Chennai. The reason behind the matter is, need of low costs homes increased.

                A few years ago, people were interested in buying homes within the city limit. However, the economy slowdown in 2009 has also echoed in construction industry. So many builders were not able to sell homes, which were built until 2012 end. Afterwards, builders hesitated to build luxury homes and villas. At the end of 2012, the deficit for homes has been increased more than 2.6 Cr in metropolitan cities in India. In this, nearly 70% of homes are low value homes, which is the most choice of middle-class families. Corporate companies have started to invest in real estate industry, as the need for homes is increased.  Many corporate, including Smart Value Homes, Mahindra Lifespaces, and Patel Realty putting effort to execute new plans for home needs.

                Though, this matter can be welcomed, top builders are able to build homes only in the outskirt of cities, because of the land value within the city limit is higher than the land in the outskirt of metropolitan cities. They are able to build homes at low cost from 25 to 30 km away from the city limit in cities like Chennai, Bangalore, and Pune. In addition, the land value is low only at there. But, they are able to build homes between 10 to 15 kms cities like Kolkata and Ahmedabad. Builders are expecting such a situation should come in Chennai. 

                 In general, all are having dreamed about buying their own home; this is high in people who are earning 4 to 5Lakh in a year. They are even ready for to get the loan from banks. Builders are aiming them and interested to build fewer area houses from 550 to 700/sq.ft. Moreover, people are not interested in buying 2BHK and 3BHK homes. So, they avoid building such houses, and reduced luxury apartments and flats significantly, a statistic report said. 


                 Top builders are planning to build more low value homes in the future. Undoubtedly, the outskirt of Chennai city would be the root for this.