The affordable housing sector in Chennai has seen the maximum number of sales out of the total supply when compared to mid-segment and luxury housing, primarily due to low ticket sizes. This housing segment offers ticket sizes below Rs. 30 lakh, and the supply is more than 15,000 units with an absorption of 70 per cent.
Associated projects are mostly in the suburban locations of the city, with unit sizes in the 400-700 sq.ft. range. Even as the sale velocity for mid-income and luxury housing in Chennai fluctuates with macro-economic variations, the city’s affordable housing segment has been witnessing steady demand on the outskirts. Availability of large land parcels at lower price and the rapid expansion of the city along the growth corridors of OMR, GST Road and NH4 have encouraged real estate developments even in the outlying areas.
Overall, the Chennai property market is gaining momentum, since the unsold inventory has dropped in the city compared to all other metro cities, which will boost its residential real estate sector. The unsold inventory is around 47,000 units, which is expected to be sold in the next 26 months. During first half of 2016, there was few new launches as the developers are extra cautious in launching projects.
Buyers on their part are not in a hurry in investing in a house. When it comes to choosing a home, be it affordable or luxury category, they are doing their homework by assessing the location, price appreciation, by taking into consideration factors such as existing and proposed infrastructure, proximity to employment hubs, existing social infrastructure, etc. The following areas offer options for affordable housing seekers and simultaneously offer good returns on investment over mid-to-long term:
Located close to Chennai municipal corporation area and just a few kilometres from the IT corridor, Perumbakkam is a fast developing suburb, which is also well-connected to GST Road and ECR. Yet another advantage is its proximity the airport, Tambaram railway station, and Velachery MRTS.
Moreover, the proposed extension of Metro Rail will also have an impact on the property market of this location. The area is expected to develop further over the next few years, Perumbakkam is certainly an area for end users and investors must watch out for.
Current price range: Rs. 3,000 – Rs. 4,800 per sq.ft.
Strategically located along SH-57 and closer to Chennai-Bengaluru industrial corridor, Oragadam is home to a number of affordable projects. This location has seen stable demand from low and middle income groups, mainly industrial employees looking for 1 and 2BHK flats, as most properties are priced below Rs. 30 lakh.
Its proximity to major industrial hubs, the proposed SIPCOT Industrial Park at Vallam and Vadakkal, and the proposed Chennai Peripheral Link Road will also boost residential demand in the area. Though the social infrastructure is in a nascent stage, developers are providing basic amenities within townships. Considering the proposed government’s initiatives, the micro market will witness good amount of investment which in turn will increase the housing demand.
Current price range: Rs. 3,000 – Rs. 3,200 per sq.ft.
In the past few months, this location has recorded huge appreciation in the residential property segment. This can be attributed to the availability of well-developed infrastructure, proximity to the IT hub in Ambattur and industries in Poonamallee, and excellent connectivity via road and rail.
The demand in this locality is mainly driven by industrial employees, IT employees, and self-employed buyers. Proximity to the operational outer ring road will enhance the connectivity and bring in investments in coming years.
Current price range: Rs. 2,800 – Rs. 3,300 per sq.ft.
Situated close to Grand Southern Trunk (GST) Road and Old Mahabalipuram Road (OMR), Thiruporur enjoys excellent connectivity to Chennai city and other parts of Tamil Nadu. Thiruporur has gained prominence in recent times because of various development proposals from both public and private sector players, and also because it is located along the proposed Phase II of OMR.
Major economic drivers in the area include: Ascendas One Hub, an industrial township spanning 1,500 acres, the employment potential of 40,000 jobs at Payanur, and the SIPCOT IT Park in Siruseri.
Current price range: below Rs. 3,300 per sq.ft.
Declared as an industrial node as part of the upcoming Chennai-Bangalore industrial corridor, Ponneri is easily accessible from the upcoming industrial park by Mahindra Lifespace, Gummidipoondi SIPCOT, and Sri City. Though it is located 40 kms from the central business district of Chennai, the travel time is reduced with Chennai Suburban Railway connecting Sullupetta and Chennai Central Railway Station.
Traditionally, real estate demand was driven by plotted development projects, while in the recent times apartments and villas have been launched. Demand for residential developments is mainly due to prominent educational institutions and upcoming industries in the region.
Current price range: Rs. 3,200 – Rs. 3,600 per sq.ft.
Major drivers in the residential sector are the industrial parks located at Irungattukottai, Sriperumbudur and Valarpuram.
Its proximity to Porur, an established residential and commercial hub will help push realty demand to Kuthambakkam gradually. Moreover, if the proposed monorail comes up, it will further boost the area’s realty value. Many developers are holding large land banks and are waiting to launch projects soon.
Current price range: Rs. 3,000 – Rs. 4,000 per sq.ft.
Located between Tambaram and Chengalpattu, Guduvancheri is an upcoming affordable location. The location caters to IT employees with 2BHK and 3BHK homes with an area of 700- 1,250 sq.ft. being the most preferred. Due to the availability of huge land parcels at relatively low prices, the location witnesses large-scale projects. It is well connected to nearby cities by rail and road with quality healthcare facilities, and educational institutions. Infrastructure proposals such as the establishment of a new mofussil bus terminus, rail connectivity from Avadi to Guduvancheri, will strengthen the real estate market.
Current price range: Rs. 2,800 –Rs. 3,500 per sq.ft.
Pudupakkam’s proximity to OMR, and its strategic location —along Vandalur – Kelambakkam Road near the Siruseri SIPCOT IT Park— is an advantage.
Presence of IT giants such as Infosys, TCS, Wipro, Accenture, and Cognizant has added to the employment potential of this region. The location is also supported by strong physical infrastructure such as schools and hospitals.
Pudupakkam primarily offers 2 BHK and 3BHK apartments with varying sizes in the 850 sq. ft. to 1100 sq. ft. range.
Current price range: Rs. 3,500 – Rs. 4,000 per sq.ft.
Located between ORR and Chennai By-pass, Kundrathur is a preferred destination for investment. It’s in proximity to Chennai International Airport, hospitals, schools and colleges, retail establishments, Thirumudivakkam Industrial Estate, and also has easy and direct accessibility to Sriperumbudur and Oragadam. The completion of ORR and new industries such as Royal Enfield, Yamaha, along the Sriperumbudur-Oragadam corridor will increase the demand of housing in the region. Locations in and around Kundrathur such as Thirumudivakkam, Thandalam, and Nandambakkam also have notable supply of affordable housing projects. It is one of the suburbs of Chennai witnessing a good capital and rental appreciation.
Current price range: Rs. 3,100 – Rs. 3,800 per sq.ft.
The locality has a good supply of quality plotted developments dotted along the stretch of Vandalur-Oragadam Road and ORR. The location enjoys excellent road and rail connectivity to the city. Its close proximity to Shriram Gateway and Oragadam Industrial Hub makes it a preferred destination for employees from these developments.
Surrounding neighbourhoods such as Manimangalam, Padapai, Mannivakkam, and Varadharajapuram are also witnessing a descent supply of affordable housing projects.
Current price range: Rs. 3,100 per – Rs. 3,700 per sq.ft.
The writer is National Director, Head of Operations – Strategic Consulting, JLL, India
Credits The Hindu