Northern parts of Chennai have long been considered the backwater region of the city. But the residential price index (residex) put out by the National Housing Bank (NHB) shows that Ayanavaram, Kolathur and Purasawalkam have seen the maximum appreciation in residential prices in the last six years across the country.
Prices in these localities have registered a 650% growth during the period. In actual terms, apartment prices have gone up from 1,500 per sqft to more than 9,000 per sqft in Aynavaram. It is impressive taking into account the fact that the city’s overall residential index grew only 214% during the same period.
Areas that have witnessed the second highest increase in apartment prices are Virugambakkam, Anna Nagar, Kilpauk and Nungambakkam. The average price in Nungambakkam, for instance, has appreciated from 12,000 per sqft to 30,000 per sq ft. Going by the residex, Egmore and Chetpet, where prices were very high in 2007, have seen the minimum growth – just 76% in the last six years. Price in Egmore, for instance, has gone up from 8,500 per sqft to 15,000 per sqft.
On the other hand, prices have more than doubled in Dr Radhakrishnan Nagar more than tripled in Tondiarpet, Perambur, Chromepet, Guindy, Velachery, Mylapore, Adyar and Thiruvanmiyur. The south Chennai residential hubs started off at higher base prices in 2007 when the NHB started indexing residential price fluctuations across the country. Other areas such as Ashok Nagar, T Nagar and Saligramam have seen close to 400% increase.
Chennai’s growth is impressive in comparison with many other cities. The maximum growth in the National Capital Region has been 160%, in areas like Vasant Kunj, Punjabi Bagh and Shalimar Extension. The situation in Bangalore is no different either. Lavelle road, where the property prices have appreciated the most in Bangalore as per NHB, saw only 161% growth. Mumbai has done a shade better. Lower Parel, Matunga East and Mahim West witnessed 260% growth in the past six years. Appreciation in most other areas of Mumbai ranges from 50% to 150%.
Lack of adequate infrastructural growth in outlying areas of the city is one of the key factors for prices still shooting up in Chennai’s central business district, said Confederation of Real Estate Developers’ Association of India Chennai chapter president Sandeep Mehta. “There is more stress on the core city. There are very few projects coming up within the city, but the demand is many-fold. On the other hand, there are a lot of projects coming up on the outskirts. But people are hesitant to go there because of lack of good connectivity and other infrastructure. People travel long distances, 20km to 30km, in cities like Bangalore and Hyderabad, where infrastructure is fast growing in the suburbs,” he said.