Demand for vacant plots is gaining momentum across all micro markets in Chennai. Among the factors attributed to the sudden revival are investment inflow into growth corridors like Oragadam, improved connectivity level, transportation and spurt in the number of housing projects under development in suburban and peripheral areas.
There is a perceptible shift in demand for plotted development projects in that enquiry levels are up by 15-20% over last year. This is in spite of the fact that government has recently hiked the guideline values for land across the state.
Yet another factor that is convincing homebuyers is the postponement of home buying decision due to a combination of factors. Those who are unable to take a firm decision due to locational preferences and price, are convinced that the only way to compensate the growing home prices is to plough back smaller investments which is one reason for the sudden spurt in demand for vacant sites across the city.
The rate varies from Rs.500 – 1200 per square feet for units located in 50km radius from city centre and Rs.250 -1,000 per square feet in 100 km radius. If the project is well maintained and has a club house, a premium on the sale price is demanded by select developers.
Plot loans are available from a few institutions but at a higher lending rate and the quantum of loan is restricted to the guideline value of the property which is less than the market value. This increases the upfront margin money for investors seeking plot loans. A majority of the housing finance institutions insist on construction within the prescribed period and so investors may not be able to benefit much out of plot loans if the intention is to just make medium to long-term gain.
Investors are to enter into plotted development projects only if their investment horizon is beyond five years. This is because 100% price appreciation is possible in 50 km radius in five years and in 100 km radius, it might take 7-9 years to reach that level of appreciation.
Though the number of organised players in plotted development projects do not even cross double digit figure, mushrooming of unorganised players in far flung areas is a disquieting feature. Apart from the 24×7 maintenance, ground realities have to be observed before plunging into investment as that will bring value to the overall investment, caution property experts on condition of anonymity. This is because a number of investors have been taken for a ride by unscrupulous elements in the industry and moving from pillar to post to seek justice.
Among the basic documents that need to be verified by investors in plotted development projects specific mention must be made about title deeds, death certificate in case of inheritance by intestate succession, Will and probate in the event of testamentary succession, revenue documents like Patta, chitta and adangal, encumbrance certificate for a minimum period of 30 years, layout sanction for the plot, proof of documents to show EB connection, MMWSS&B system, and authentic document to establish the identify the vendor.