New launches spurred residential market in Chennai

Chennai’s good economic density, progress in infrastructure development and growing influence of IT/ITeS has enhanced sales in the realty markets. The Chennai property market showed a remarkable improvement seeing an average appreciation of 10-12 per cent in the residential sector across the city during past June-Nov 2012 period.

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The Chennai realty segment witnessed location-wise appreciation in values. There was a fragmented demand-supply across locations and henceforth value appreciations.” Areas such as Thoraipakkam, Sriperumbudur, Medavakkam and Kelambakam noted an escalation of up to 20 per cent in residential property values in past six months and is still appreciating, he added.

“The new projects being launched in past one year is the key factor leading to elevated inventory level in realty markets,”The new segment offering variety of deals to the end users and in wide range of price brackets to choose from has created buzz in the property market. With options of investing in a luxury apartment to a sea-facing villa has fetched NRI’s, HNI’s and buyers and investors from different parts of the country, he added.

“Chennai’s supply of new residential units has tripled in Jul-Sep 2012 quarter as compared to the previous quarter.” Maximum new supply has been witnessed in Chromepet, Thirumallaivoil and Egmore in the mid‐segment price range of Rs 50 lakh onwards.

The new segment witnessed more number of transactions compared to the resale segment. “New residential units are equipped with all basic and luxury features which are missing in resale market and therefore it is more preferred,” says Gopal. The average capital values of newly launched apartments vary from Rs 3,200-4,500 per sq ft depending on location and other facilities.

Better infrastructure, availability of land parcel for development and relatively lower land prices as compared to Bangalore, Mumbai, Pune and Gurgaon makes Chennai an attractive destination for investment.

Unauthorised plots in Chennai bought till 2007 may get approval

imagesThere’s relief on the way for people who have bought plots in unapproved residential layouts. If the state government has its way, all residential plots registered before July 1, 2007 will be given approval after levying a penalty, as has been done in the case of illegal buildings.

Following a proposal from the Chennai Metropolitan Development Authority (CMDA), the government is contemplating relaxing norms for approval of unauthorized layouts that have proliferated over the last few years in the Chennai Metropolitan Area (CMA) and in areas under the jurisdiction of the Directorate of Town and Country Planning (DTCP).

The suggestion was made at a meeting of the CMDA’s top decision-making body. As of now, only residential plots registered before December 31, 1989 are approved under the regularization scheme in operation in CMA limits. However, on receipt of the CMDA proposal, the government has taken a view that instead of limiting the exercise to CMA, it should look for a comprehensive solution to all unapproved residential layouts that have sprung up across the state. In this regard, the state housing department has chosen to work in coordination with municipal administration and rural development departments.

A senior official said, “Since municipalities that fall under the municipal administration department and village panchayats under the rural development department have been delegated some powers to approve plots, any solution without taking them on board will remain a piecemeal effort. We also need to involve the land registration department also to ensure that registration of unapproved plots do not take place in future. Otherwise, once we regularise old violations, there will be new violations. The chief secretary will soon convene a meeting to finalise the action plan”.

A CMDA official said the problem of unauthorised plots was not a major one in CMDA limits, where the regulatory body has done zoning of all land, determining their use. But in DTCP limits, very few cities and towns have prepared development master plans.

A DTCP official said, “Unapproved residential layouts continue to spring up across the state. Many promoters who are stuck with large areas of agricultural wetlands are converting them into residential layouts and selling them with the connivance of village panchayat presidents and ward members. Despite the government clarifying time and again that approvals from village panchayats have no legal sanctity and buyers cannot avail bank loans on such plots, people continue to buy them”.

The problem became acute after the state imposed restrictions on conversion of agricultural wetlands into residential plots in January 2011. “The government should ban firms selling unapproved layouts from real estate activity and take strict action against panchayat presidents and ward members who approve unauthorised layouts,” a realtor said.

Source: The Times of India, Chennai