Homes in Suburban Chennai turn costlier with growth.
Within the past two years a significant rise in land prices and escalating cost of construction have seen property prices in most city suburbs appreciate by over Rs. 1,000 per square feet. A study comparing six analogous residential localities on the outskirts of Chennai reveal that the prices have gone up by to almost 75% in some of the areas.
According to a report by an IPC, apartments in Medavakkam, which is considered to be amongst the thirteen most popular residential hubs; has seen an appreciation in its value of Rs. 1,200 to Rs. 1,400 per square feet in last two years; depending on the location of the project. North Chennai, once considered as a backwater region, is now growing, thanks to connectivity through Metro Rail project and good roads.
Cost of construction has seen a rise of 30% to 40% in the last couple of years. Earlier, builders used to worry about mounting cost of construction material only during the time of budget, but now, the prices are rising on a monthly basis due to high rate of inflation.
Construction company Isha Homes, which has a significant presence in Medavakkam, declared that the price appreciation of their built projects was 80% from Rs. 2,800 per square feet to Rs. 4,200 per square feet in less than two years. Another reputed city builder, Navin’s that has operations in Medavakkam, declared that the price of apartments in their projects has gone up by roughly 55% from Rs. 2,900 to Rs. 4,100 per square feet. Both the builders claim to have already sold their stock out.
Taking into consideration the presence of social infrastructure like schools, shopping facilities and above all its close proximity and accessibility to and from costlier locations such as Velachery, Old Mahabalipuram Road, Pallavaram and Tambaram, Medavakkam’s real estate market is primed to grow even faster over the next few years. However, in the last 24 months it has been Manapakkam that has been witnessing the maximum appreciation.
Projects in Manapakkam which were selling at Rs. 3,600 per square feet two years ago, are now valued at Rs. 6,300 per square feet. Recent, comprehensive surveys conducted in Maduravoyal, confirm that the booking rate of Rs. 2,800 per square feet back in 2008, had escalated up to Rs. 4,000 per square feet by 2010; and today it is Rs. 5,500 per square feet. Builders and developers who had previously invested in the areas are very likely to launch other projects at comparably higher prices.
Localities like Thiruneermalai and Madhavaram are also amongst the other emerging real estate hubs. While the price has gone up from Rs. 2,500 per square feet to Rs. 3,900 per square feet in Thiruneermalai in two years, it has gone up from Rs. 3,300 to Rs. 3,900 per square feet at Madhavaram. Similarly, Semmancherry has witnessed a growth of Rs. 1,100 per square feet – from Rs. 3,400 to Rs. 4,500 – during the said period.
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