The Chennai market has been volatile in the last three quarters.The recent budget will have its impact on pricing due to the increase in the service taxes from 10.3% to 12%. The increase in excise duty across the product categories has led to an increase in the initial input cost, directly impacting the selling price in the market.
The good news, amidst the negative impact of the tax hike is that affordable housing has found its takers due to the increase in the number of people opting for homes in the affordable segment and the National Housing Board in-turn addressing the consumer challenges by promoting the affordable housing segment. The NHB has allotted 5000 crores to promote affordable housing and hence all the Housing and Finance Corporations across the country has lowered the tax rates for homes that come under the affordable housing slot.
This report will analyze the latest real estate trends in the Chennai Market for the last three quarters. Here we go:
Budget & Sq. feet:
In Chennai, Q3 saw a dip in buyer’s budget preferences. But in Q4, the demand has gone up considerably with home loan rates forecasted to go down and inflation coming under control. The budget preferences of the buyers have gone up by about 10% whereas the avg. sq. feet preferences has seen a 12% drop compared to Q2 figures indicating a clear movement towards smaller SKUs. One reason could be that the buyers are going for premium amenities and branded builders even if that means they have to shell out more.
BHK precedes Sq. feet:
The chart below gives a snapshot of the BHK preferences of property seekers in Chennai. An interesting trend emerging from the analysis is that though consumers’ average sq. feet preferences have come down distinctly, there has been a shift in preference from 2 BHK to 3 BHK units over the past 3 quarters. The trend indicates that the average buyer gives more importance to the BHK specifications of a property than the sq. feet specifications.
Hypothetically, a prospective buyer in Chennai is more likely to choose a 3 BHK/1000 sq. feet flat over a 2 BHK/1200 sq. feet available for the same price.
Property seekers were given the flexibility to choose up to 3 localities in a particular city in their order of preference and each locality was rated. The overall (Last 3 quarters) locality preference chart indicates how each locality fared. The Tambaram & GST belt emerge to be the hot zones in Chennai that are in great demand. Apart from its proximity to IT parks & good connectivity, the re-emergence of this region as a viable investment option is due to planned infrastructure projects like satellite city, airport and mono-rail in the pipeline.
Mood in the Market:
The Q3 of 2011-12 was a difficult period with the demand/urge to buy a property remaining weak in most markets due to higher interest rates, inflation and forecasts of a glooming recession. This reflects in the purchase intention of the buyers as well. The percentage of buyers that intended to buy a property within the next 4 months went down in Q3. More buyers decided to wait and watch the market and postpone their buying decision in Q3.
Article Source:INDIA PROPERTY