Prices of residential properties in the city have been skyrocketing ever since National Housing Bank (NHB) started preparing residex — an index for tracking the prices of residential properties — in 2007, but for one quarter, when the prices declined. Residex shows that Chennai’s residential property prices have shot up by threefold in four years. Areas like Ashok Nagar, Anna Nagar and T Nagar have boosted the price increase.
“Chennai opened up its suburb markets in a big way after 2007, while other markets were much matured by that time. That’s one of the reasons for this steep increase. Chennai grew slowly and steadily from thereon. While Bangalore, Delhi and Mumbai prices shot up suddenly and fell rapidly during recession,” a senior real estate consultant in the city said.
Residential prices in 14 other cities that residex tracks have seen more than one declining quarter, and Chennai has seen the fastest increase in the fouryear period. The closest competitor to Chennai during the period was Faridabad, where the prices just about doubled.
The prices at Virugambakkam, Anna Nagar, Kilpauk, Purusawalkam, Kolathur and Nungambakkam have shot up by six times. While, prices at hot spots like Ashok Nagar, Thyagaraya Nagar and Saligramam jumped five times, during the five-year period.
On the flip side, the growth rate has been comparatively at a slow pace (twofold rise) at Tondiarpet, Nehru Nagar, Chetpet, Egmore and Marina. The demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% until 2015, estimates say. Industry observers say the prices will head north at least for a quarter or too. But, after that it will stabilize and grow marginally.
For the January-March period, residential prices in the city grew 40% yearover-year, according to NHB Residex. This is the steepest increase among the 15 cities tracked by NHB. In the little over four-year period Chennai has seen a steady growth, and has proven to be a matured and safe market, say analysts.
“Within the city or suburbs the land parcels are slowly disappearing so the demand picture is clear and the prices are bound to shoot up. The OMR stretch has prices increasing steadily. Apart from Sri Perumbadur every area in the city will see an increase in prices. I feel the prices will rise at the current pace in the near-term and long-term in the city due to high demand,” said A Shankar, senior manager, Jones Lang LaSalle.