A 2BHK apartment along the Old Mahabalipuram Road (OMR) that was available for Rs 12,000-15,000 per month a year ago, now commands a monthly rent of Rs 15,000-18,000! This clearly indicates an annual appreciation of 20-25 per cent. Thus, investing in a residential property along the OMR in Chennai seems to be a good proposition.
OMR recorded the highest gross rental yield at 4.18 per cent during the Apr-Jun 2013 quarter. The rental values in the locality have been rising constantly with an increase of 8-9 per cent registered in the Apr-Jun 2013 quarter. This coupled with stable capital values of apartments in the locality has pushed the gross rental yield along the OMR. In fact the locality has been registering the highest rental yield in the city, ever since Apr-Jun 2012 clocking close to 4.5 per cent yield quarter-on-quarter.
“OMR is faced with a situation of over-supply today. This has resulted in capital values stagnating as buyers have a wide range of options to choose from. Even though the over-supply has had an impact on the rental values, but compared to outright sales the rental market in the location is still up beat,.
So, what has led to a situation of over-supply in the market? Most of the residential demand is pouring from IT professionals working in the numerous MNCs along the OMR. “Since many of these young professionals are not locals, they prefer rental accommodation than buying their own homes. Thus, the demand along the OMR stretch is more aligned for rental housing,”.
Thus, in case you are looking for a second home as a future asset, buying a house on the OMR might prove profitable what with the high rental returns it promises. Hardcore investors may also target OMR for healthy returns.