Commercial boom driving housing demand in Sholinganallur

sholinganallurAny area witnessing price appreciation has one key growth driver pushing the rates in the region. Sholinganallur, a suburban residential hub of south east Chennai, has seen commercial development in the past. The already existing commercial segment catering to the strong workforce in the region is now driving housing demand in the vicinity.

In the last three months, the locality has witnessed approximately 12 per cent increase in average property values. It offers a mix of properties. However, multi-storey apartments are in maximum supply. The value of majority of apartment projects are between Rs 4,200 and Rs 5,000 per sq ft.

Previously the locality has seen development of large IT hubs and dedicated SEZs. As a result, strong residential demand has been witnessed from those looking to stay close to their workplace. Sholinganallur is now considered an IT hub having footprints of well-known IT companies such as TCS, Wipro, HCL, Infosys etc. With its well developed road infrastructure and its swift connectivity through ECR link road on the eastern side and Velachery Main Road on the western side, the area offers good social infrastructure to service its residents. The presence of schools, colleges, hospitals, super markets, restaurants and shopping malls adds value to the overall investment. On account of existing infrastructure realtors and developers expect property prices to witness an uptrend in the long-term.

On the rental side, a 1,000 sq ft, 2BHK apartment fetches Rs 22,000 to Rs 25,000 per month. This kind of yield has attracted investors to buy properties in Shollinganallur.

Maximum demand has been for 2 and 3 BHK configurations. Approximately 1 to 1.5 year back demand for 2 BHK apartments was relatively high in comparison to 3BHK.  in the past one year, there has been an increase in demand for 3BHK units with sizes ranging from 1200 to 1800 sq ft. Some developers are also building small, 450 sq ft apartments mainly for the economically weaker section (EWS) category as mandated by the Chennai Metropolitan Development Authority (CMDA).



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Property values appreciate in ECR in Chennai

The property values of East Coast Road (ECR) have crossed the mark of Rs 11,000 per sq ft at prime locations near beach and are still appreciating making it a top residential locality of Chennai. Visible expansion of IT/ITeS sector acting as the catalyst in the real estate growth. Revival of demand for luxury villas, increase in property prices and launch of new projects, all this has returned and bucking the Chennai’s submarket.

“Chennai is noting a continuous demand for luxury housing from quite some time now, primarily towards the peripheral locations of the city where premium homes are available at affordable values,”. The capital values of premium apartments and luxury villas have noted a hike of 10-15 per cent in past six months. The number of enquiries also showed an upward trend, seeing a hike of up to 25 per cent during the same period. The appreciation in property values can be attributed to the fact that it is primarily end-user driven rather than investors, he added.

The stretch from Palavakkam to Mamallapuram is the key hub seeing exponential demand and supply in the residential sector. These locations house projects in the premium category catering to HNIs, NRI’s and have demand for individual bungalows/villas priced at more than Rs 2 crore.

“Rental sector is too flourishing and have noted a significant appreciation of more than 30 per cent in recent past.” The rental values of a fully furnished 4-5 BHK villas/independent houses varies from Rs 60,000-90,000 per month depending on its location and proximity to neighbourhood beach.

ECR strategic situation near to the IT corridor is the major USP of the area. Enhanced demand from expats and HNI’s visiting to city for professional reasons are the major contributor in the upward rental and capital sector. On an average, the capital values at ECR vary from Rs 2,000-6,000 per sq ft depending upon location and connectivity. Residential land is also the next most transacted category after luxury villas, sums up Kumar.

Improved connectivity level, transportation and other infrastructural activities have created spurt in the upcoming housing projects in the suburban areas such as ECR. Looking at the prevailing demand and supply ratio, it is expected that the submarket will continue to witness positive trend in values.